Indonesia has witnessed the emergence of metropolitan areas whose boundaries stretch beyond administratively defined local authorities. This prompts the need of integrated metropolitan transport planning whose attainment relies on inter-local government collaboration, particularly since decentralization policy in Indonesia. Yet, such collaboration remains considerably undeveloped. Therefore, using case study of Greater Yogyakarta, this research discusses the barriers to inter-local government transport planning collaboration. The transaction costs theory was utilized given its analytical power in explaining actors’ calculative decision for making inter-local government collaboration as chosen governance mechanism to handle metropolitan transport planning. This decision is influenced by actors’ perceived transaction costs. This research found that there are significant aspects that potentially stimulate and heighten actors’ perceived transaction costs; thus, served as key barriers to collaboration. Those aspects are: the absence of safeguard mechanism through legal and regulation framework to address non-compliance issues; uncertainty of sustained financial support; uncertainty of longer-term political commitment; the lack of perceived benefits of metropolitan transport planning; the perceived imbalances in losses and gains of collaboration; local governments’ fear of losing control over territories; fragmentation in local governments; and the absence of common-shared goals. This research also suggests that informal institution aspects and political driving forces have hindered the collaboration more significantly compared to direct practical-financial aspects.