The 6-year-old boy died Sunday at a hospital in the capital of Jakarta, said Rumizar Rusin of the Health Ministry's bird flu information center.
The boy fell sick on July 1 and was admitted to the hospital four days later, he said.
Rusin said officials were still investigating how the boy contracted the H5N1 virus.
Most human case of the virus have been traced to contact with infected birds.
The latest fatality brings the death toll from bird flu in Indonesia to 81 out of 102 cases.
Boosted by international funds, the country has stepped up its campaign against bird flu over the last year, but it still reports a steady human toll from the virus.
Bird flu has killed at least 192 people worldwide since 2003, more than 40 percent of them in Indonesia, according to the World Health Organization.
The virus remains difficult for people to catch, but experts fear it could mutate into a form that spreads more easily among humans, possibly sparking a global pandemic that could kill millions.