Significant efforts have been invested to restore degraded peatlands in Indonesia considering the high mitigation potential as an effective natural climate solution. However, peat restoration in Indonesia faces challenges such as suboptimal planning and risk management. In this study, we assessed the national potential peat restoration area using spatial analysis and identified the associated risks based on lessons learned from past restoration efforts. We estimated the extent of potential restoration areas by analyzing canal networks, burnt areas, and critical land maps at the national scale. We conducted focus group discussions (FGD), in‐depth interviews, followed by a national workshop with relevant stakeholders to assess the potential risks and develop risk management strategies for peat restoration. Our analysis estimated 6 Mha, or 45% of Indonesia's total peatland area, as potentially restorable areas for rewetting and/or revegetation efforts. Of this potential area, 50% falls under concession holder management. The identified risks consisted of technical (39%), management (38%), social (17%), and economic (6%) factors, with 15 and 22% classified as extreme and high risk, respectively. Policymakers can use these findings to strengthen regulations and improve the chances of successful restoration implementation, supporting Indonesia's emissions reduction target and providing economic benefits for restoration actors.