Wearing a light brown jacket and looking relaxed, Mr Ahmadinejad was greeted amid tight security by Indonesia’s Foreign Minister Hassan Wirayuda and about two dozen officials from both countries.
When asked if Iran's nuclear program would be raised in bilateral talks, Mr Ahmadinejad said, "Certainly it will be discussed, it's an important issue."
A spokesman for Indonesia’s foreign ministry, Desra Percaya, says Indonesia could "play the role of a middleman" between Iran and its western opponents. Indonesia has already said that it supports Iran's right to pursue nuclear technology for peaceful means.
During the five-day visit, Mr Ahmadinejad is expected to sign agreements on energy cooperation and tourism, and meet with his Indonesian counterpart Susilo Bambang Yudhoyono.
He is also due to give a speech at the University of Indonesia, hold talks with students at the Syarif Hidayatullah Islamic University and the Indonesian Chamber of Commerce.
Mr Ahmadinejad will also meet with Islamic leaders and attend Friday prayers at Jakarta's Istiqlal mosque, before flying to Bali for a meeting of the Developing-eight group (D-8) of large Muslim countries.
No official response
The Iranian president's arrival, in the world's most populous Muslim country, came as the White House said that there would be no formal written response to a surprise letter Mr Ahmadinejad wrote to US President George W Bush.
In the 18-page letter, the first from an Iranian leader to a US president in more than 25 years, Mr Ahmadinejad touched on the nuclear crisis, but gave no sign that Iran would adhere to UN demands to freeze uranium enrichment work, which is at the heart of fears that Iran is using an atomic energy drive as a mask for weapons development.
Speaking to the IRNA news agency, foreign ministry spokesman Hamid Reza Asefi said the letter was not designed to influence members of the UN Security Council, but was meant to elicit a direct response from the US president.
"The letter from Mr Ahmadinejad to his American counterpart was not aimed at influencing the nuclear question. We are awaiting the reaction of the person it was addressed to," Mr Asefi said.
But that reaction is unlikely to come, "We've already given our response," National Security Council spokesman Frederick Jones said, referring to statements by Secretary of State Condoleezza Rice and other US officials rejecting the letter.
Ms Rice said on Monday that the letter offered "nothing new" to earlier pronouncements by Iran about its nuclear program, “There is nothing in this letter that in any way addresses any of the issues really that are on the table in the international community," Ms Rice said.
Diplomacy not exhausted
Without commenting on the letter, Mr Bush said that diplomacy remained the number one option in the dispute with Iran, telling reporters in Florida: "In the short term ... we'll keep diplomacy going, knitted up with as many nations as possible."
"A president has got to be able to say to the American people, diplomacy didn't work" before escalating to other measures, Mr Bush added.
Mr Bush highlighted a meeting in New York that attempted to find a strategy to force Iran to give up uranium enrichment. The meeting which included the US, Russia, Britain, China, France and Germany failed to produce an agreement.
He added that the international community has "a common interest to prevent the Iranians from getting that weapon," adding that Washington remained committed to ensuring at all costs that Iran never attain the ability to develop atomic weapons.