Abstract: Indonesia and Malaysia are the two members of ASEAN and the tourism sector contributes significantly to the economy of these two countries. These two countries have similar culture, language and climate, even though, they are contrast in number of population, wide, ethnic, government system and government policy on tourism. Even though these two countries have similarities but the tourism performance is different. This study will try to investigate the comparison of tourism sector between the two countries including performance, the competitiveness, the policies, the sources of tourism sector and contribution to the economy of both countries. It may be concluded that Malaysia has a better competitiveness compared to Indonesia. Furthermore, the two countries have been trying to prepare the programs and policies which are conducive to the development of tourism sector. They have had a definite program to increase the role of tourism to the economy each. However in implementation, Indonesia hampered by sluggish bureaucracy so that the results could not be maximized. In terms of performance, Malaysian tourism sector is better than the performance of Indonesian tourism sector. Nevertheless in terms of quality, Indonesia has much more appeal than that of Malaysia, Indonesian visitors are more variation, the market diversification is much stronger and there are more places to visit. Moreover in terms of contribution to GDP and the contribution to capital investment, generally, Indonesia is better than Malaysia while in terms of contribution to the employment, Malaysia tend to be better than Indonesia.