How To Make Peanut Sauce for Satay

The following traditional Indonesian recipe for the sauce, also called Sambal Kacang (“kacang” meaning “nut” in native Malay language) uses fresh roasted peanuts and tastes great with Satay. This popular dipping sauce, also known as Bumbu Satay, is also used as a dressing for Gado-gado, which is a warmed mixed vegetable salad.

There are many different recipes and versions or variations of this peanut sauce, most of them involving the use of peanut butter and or coconut milk, cilantro or curry. Other ingredients also used are coriander seed, cumin seed, kencur, lemongrass etc. 

Coconut milk gives the sauce that extra richness, but ignore recipes that call for using peanut butter. Sure, it's convenient, but the flavor can not come close to that of freshly roasted crushed peanuts.


  • 1 cup raw peanuts with their reddish inner skins
  • 3 cups hot water
  • 2-4 large red chilies
  • 3 shallots
  • 2 cloves garlic
  • 1 thumb-size piece galangal or ginger, peeled and sliced
  • 1/2 tsp shrimp paste
  • 1 tsp brown sugar
  • 2 tbsp tamarind paste or lime juice
  • Salt to taste
  • 2 tbsp cooking oil

Step 1

Heat the oil in a wok or pan and toast the peanuts, stirring often, for 4 minutes. Take them out with a slotted spoon, drain and leave to cool on towels. Discard the oil, except for 1 tablespoonful.

Step 2

Grind or blend the peanuts in a food processor or coffee grinder until coarse or fine, depending whether you like it coarse or fine.

Step 3

Put chilies, shallots, garlic, galangal or ginger and shrimp paste into a food processor and blend until smooth.

Step 4

Transfer everything back to wok or pan, and fry in the remaining oil for 1 minute. Remove from heat and add sugar, peanuts, tamarind water or lime juice and salt to taste. Mix well.

Add just enough hot water until desired consistency.


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