INDO12, a 1/12° regional version of the NEMO physical ocean model covering the whole Indonesian EEZ has been developed and is now running every week in the framework of the INDESO project (Infrastructure Development of Space Oceanography) implemented by the Indonesian Ministry of Marine Affairs and Fisheries. The initial hydrographic conditions as well as open boundary conditions are derived from the operational global ocean forecasting system at 1/4° operated by Mercator Ocean. Atmospheric forcing fields (3 hourly ECMWF analyses) are used to force the regional model. INDO12 is also forced by tidal currents and elevations, and by the inverse barometer effect. The turbulent mixing induced by internal tides is taken into account through a specific parameterization. In this study we evaluate the model skill through comparisons with various datasets including outputs of the parent model, climatologies, in situ temperature and salinity measurements, and satellite data. The simulated and altimeter-derived Eddy Kinetic Energy fields display similar patterns and confirm that tides are a dominant forcing in the area. The volume transport of the Indonesian ThroughFlow is in good agreement with the INSTANT current meter estimates while the transport through Luzon Strait is, on average, westward but probably too weak. Significant water mass transformation occurs along the main routes of the Indonesian Throughflow (ITF) and compares well with observations. Vertical mixing is able to erode the South and North Pacific subtropical waters salinity maximum as seen in TS diagrams. Compared to satellite data, surface salinity and temperature fields display marked biases in the South China Sea. Altogether, INDO12 proves to be able to provide a very realistic simulation of the ocean circulation and water mass transformation through the Indonesian Archipelago. A few weaknesses are also detected. Work is on-going to reduce or eliminate these problems in the second INDO12 version.