Although traditional costumes are important to the fashion industry, marketing and fashion research has not thoroughly examined the design of traditional costumes in contemporary times. This paper aims to explore the fashion development process for traditional costumes through a qualitative case study of the Indonesian kebaya. By interviewing 34 kebaya designers and observing 25 designers’ workshops, we identify four critical stages of the development process, including cultural referencing, cultural amalgamation, co-sourcing, and co-producing. Examining these stages reveals how traditional costume designers maintain the authenticity of traditional costumes while adapting to the global fashion system. Our findings also show that fashion designers manage the tension between tradition stability and fashion ephemerality through harmonizing activities during the fashion development process.