Haze from forest fires in Sumatra has forced schools to close in Malaysia, and prompted warnings from the Malaysia and Singapore governments.
The haze has caused air pollution levels in the country to jump to their highest level in four years.
Officials say they will press the Indonesian government to take action.
The Indonesian Environment Ministry acknowledges that forest fires in Sumatra are the cause of the haze and says it is investigating further.
This is not the first time Singapore and Malaysia have complained about the haze from fires burning in Indonesia.
In 2006 air pollution levels in Singapore touched record highs because of the smog.
Blanket of smog
They have not reached those figures this week yet, but are still alarming enough for the Singapore government to urge those with respiratory ailments and heart conditions to stay indoors.
In Malaysia, more than 200 schools have closed.
Arief Yuwono, the deputy director at Indonesia's Environment Ministry, told the BBC that his team was co-ordinating with the local government in Sumatra to find out who started the fires.
Environmental activists say despite regulations curbing the practice of forest burning in Indonesia, officials are not tough about enforcing the rules.
Bustar Maitar from Greenpeace told the BBC many farmers in Sumatra still burned trees to clear the land, even though it is illegal, so they can plant crops.
The huge fires cause plumes of smoke, carried by the wind to neighbouring countries.
One of the worst cases was in 1997, when a blanket of smog covered much of South East Asia.
Millions of people suffered from health problems, medical costs soared, and tourism suffered badly. Officials are keen to avoid a repeat of that scenario.