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The study of language and literature today are inseparable. Unfortunately, the phenomenon of Indonesian learning in junior high schools is in a hesitant position due to the lack of formulating literature as teaching material including indigenous wisdom-based literature that can threaten the extinction of indigenous literature. At Buru Island, literature learning is integrated into Indonesian subjects, but the teachers there are more focused on teaching language using general literature rather than indigenous wisdom literature. Therefore, this study aimed to explore the situation and needs analysis of the indigenous wisdom-based literature in teaching Indonesian language at Buru Island. To achieve the objectives of the study, the researchers employed Research and Development (R&D) applying Borg and Gall's steps. This method has certain procedures for the information collecting data related to the situation and needs analysis of 350 junior high school students through questionnaire distribution, interview, and observation toward the process of Indonesian teaching in the classroom. The situation of learning literature in the study involved (1) the law of local content learning, (2) curriculum, (3) syllabus, (4) lesson plan, (5) coursebooks, (6) teachers' competence, and (7) stakeholders' concerns, while, the students' need analysis involved (1) current ability and interest in literature, (2) feedback of students' ability and interest in literature, (3) literature skills priority, (4) learning style, (5) literature learning facilities and infrastructure, (6) literature materials on indigenous wisdom, (7) coursebook of indigenous wisdom-based literature, and (8) learning approaches and strategies based on indigenous wisdom. The result shows that there were still many shortages in implementing of indigenous wisdom-based literature learning in junior high schools, so students' ability and interest were lack. Therefore, the situation and need analysis becomes very important to be explored and to be a consideration in designing course books in indigenous wisdom-based literature for the future.