The purpose of this study is to analyze the determinants of local governments’ performance in Indonesia. We hypothesize that organizational commitment, management incentives, monitoring, legitimacy and institutional incentives would affect local government performance. Unit of analysis is local governments in Indonesia from 2009-2012. The results show that follow-up of audit recommendation, level of dependency, portion of non-routine expenditures, number of legislative member, number of voters and local government wealth has positive effect on local governments’ performance. Implications of this study are: local governments should increase commitment to follow-up all audit recommendations given by BPK; increase portion of non-routine expenditure and own-source revenue in order to have better performance. Legislative board can support to increase performance by doing effective monitoring.