This article examines the role of the state in fostering and developing folk arts during the New Order era (1966–1998) as part of Indonesia’s national cultural policy. The study aims to analyze how the government implemented programs for the preservation and development of folk arts within the framework of national development while responding to the challenges posed by modernization and globalization. The research employs the historical method, including heuristics, source criticism, interpretation, and historiography. The primary sources consist of contemporary newspapers, policy documents, and various publications containing information on folk art activities during the New Order period. The findings reveal that the government positioned folk arts as an important instrument for cultural development and the construction of national identity. Various programs, including the inventory and documentation of regional arts, the organization of folk-art festivals, the establishment of cultural institutions, as well as financial support and promotion through mass media, became the principal means of fostering folk arts. These policies encouraged the growth of art studios and increased public appreciation of traditional arts across different regions of Indonesia. Nevertheless, during the 1990s, folk arts faced significant challenges due to the expansion of popular culture and modern media. This situation prompted artists and government institutions to pursue various innovations to keep folk arts relevant and appealing to contemporary audiences. The study demonstrates that New Order cultural policies functioned not only as instruments of cultural preservation but also as part of a broader strategy of national development and nation-building. Folk arts continued to be promoted through festivals that attracted both domestic and international audiences. In addition to receiving government support through cultural development funding, folk arts also benefited from the active involvement of artists and cultural practitioners who organized discussions and forums addressing the position of traditional arts amid the challenges of globalization.