It is not very easy to generally define the relationship between state and religion because, when looking at the historical perspective, the relations between these two have appeared in various forms pending certain circumstances that the state faces. Nowadays, there is no exception when discussing the issue of this relationship. However, one can say the difference from the old time is that the constitution normally prescribes the relationship between the two. Indonesia has the largest Muslim population of any country in the world. During the period of constitutional reform from 1999 to 2002, several Muslim groups and political parties tried to introduce syari’ah into the Constitution. However, they recognized that their proposal would not make a consensus among different religions, political parties, etc. Pancasila-based State is considered as the only solution for the purpose of maintaining the unitary state in Indonesia. A State should be neutral to religion. although human legal thought could be inspired by religious laws, any religious laws cannot or may not be enforced by the state. All parts of society, such as the family, the religion, economy and political parties participating in decision-making, drafting any law, etc., they try to realize their interests and objectives. We can admit that religion can have an impact on public life. However, it should be processed and enforced through state mechanism, rather than religious law. To conclude, the state involvement in religions shall be understood in the scope of guaranteeing individuals’ freedom of religions as much as possible from the perspective of fulfilling its duty. Moreover,it should be formed in the scope of substantial equality between diverse religions and of preventing discrimination. This paper will discuss and analyze the relations between state and religion through the constitutional dispute in the religious areas.