A new version of the island rule, which relates transport around an island to wind and pressure forcing, provides a basis for comparing various published theoretical estimates of the long-term mean Indonesian throughflow magnitude. It is found, among other things, that nonlinear effects near Halmahera and pressure gradients across New Zealand may modify the long-term throughflow magnitude. Recent theoretical estimates of interannual throughflow variations are in approximate agreement with observation; Indian Ocean Kelvin waves play an important role. On still shorter timescales and for understanding flow details in different channels, consideration of the full details of the Indonesian region via numerical modeling becomes essential. Most of the throughflow enters from the Mindanao Current. The process by which the South Pacific waters eventually reach the Mindanao Current appears to involve some nonlinear retroflection process (particularly in northern summer) and subsequent freshening along long pathways in the North Pacific. Observed water mass transformations in Indonesian waters demand a vertical eddy diffusivity of about 10−4 m2 s−1, large enough to generate turbulent heat fluxes of order 40 W m−2 at the base of the mixed layer. According to numerical models, changes in ocean circulation associated with the throughflow are likely to affect patterns of heat exchange with the atmosphere in widely separated regions of the world ocean. In particular, an increased throughflow will result in more heat loss to the atmosphere in the subtropical Indian Ocean and less in the Pacific Ocean. Simple, physically reasonable mechanisms have been offered for these model results. Observational evidence to support or refute these mechanisms is rather fragmentary but is reviewed here. Our present understanding of the throughflow permits some informed speculations as to the possible role of the throughflow in coupled ocean-atmosphere phenomena, such as the El Niño-Southern Oscillation (ENSO). Earlier estimates of western Pacific reflectivity seem largely confirmed by recent observational results. However, it is suggested that tidal mixing in the Indonesian seas may generate ENSO-related sea surface temperature anomalies there, possibly affecting the development of westerly wind bursts.