Background It is recommended that young child contacts of sputum smear positive tuberculosis cases receive isoniazid preventive therapy (IPT) but reported adherence is low and risk factors for poor adherence in children are largely unknown. Methods We prospectively determined rates of IPT adherence in children < 5 yrs in an Indonesian lung clinic. Possible risk factors for poor adherence, defined as ≤3 months prescription collection, were calculated using logistic regression. To further investigate adherence barriers in-depth interviews were conducted with caregivers of children with good and poor adherence. Results Eighty-two children eligible for IPT were included, 61 (74.4%) of which had poor adherence. High transport costs (OR 3.3, 95% CI 1.1-10.2) and medication costs (OR 20.0, 95% CI 2.7-414.5) were significantly associated with poor adherence in univariate analysis. Access, medication barriers, disease and health service experience and caregiver TB and IPT knowledge and beliefs were found to be important determinants of adherence in qualitative analysis. Conclusion Adherence to IPT in this setting in Indonesia is extremely low and may result from a combination of financial, knowledge, health service and medication related barriers. Successful reduction of childhood TB urgently requires evidence-based interventions that address poor adherence to IPT.