The epicentre was recorded in Halmahera, the largest island in North Maluku – on the eastern side of the Asian country.
It struck at a shallow depth of 10km at 9.10am local time.
Indonesia authorities issued a tsunami warning at 9.41am before later withdrawing it.
There have been no immediate reports of damage or casualties.
There is a 34% chance of fatalities, according to earthquake monitoring site USGS.
Last week, a tsunami warning was issued after another 7.1 magnitude quake rocked Indonesia’s Sulawesi island.
The United States Geological Survey (USGS) put the magnitude at 6.9, centred 185 kilometres (114.8 miles) southeast of Manado, at a depth of 24 kilometers (15 miles).
It caused panic in the city of Ternate, where people ran to higher ground.