A Qantas Airways flight from Perth to Singapore was delayed on Wednesday after a passenger found a box-cutter in a seat pocket.
The scare follows a knife attack on Australian flight staff last month
The Australian authorities have launched an investigation into the incident - the fourth air security breach in the country in as many weeks.
The knife - reported to be similar to those used in the 11 September hijack attacks on the United States - was found soon after Flight QF77 took off from Perth International Airport.
A passenger alerted the cabin crew, and the aircraft returned to Perth, where Australian Federal
Police were immediately summoned.
All 233 passengers were taken off the aircraft and re-screened, causing a 90-minute delay, a Qantas spokesperson said.
A spokesman for Transport Minister John Anderson said the knife could have been placed into the seat pocket while the plane was in Jakarta.
Zainuri Lubis, Indonesia's national police spokesman, said the Jakarta authorities could not be held responsible if this were the case.
"They can't blame Indonesia. It is their duty to conduct a thorough check of passengers' belongings that might still be on the plane after every flight," he told Reuters news agency.
There have been a series of security scares on Australian passenger flights in recent weeks.
A man from Sydney was arrested two weeks ago after making verbal threats on a plane which was due to take off from an airport in Melbourne.
Just days later, another man was detained for brandishing a knife on a flight from Sydney to Cairns.
And on 29 May, a man armed with two wooden stakes allegedly tried to hijack a Qantas plane travelling from Melbourne to Tasmania.