Thai Style Peanut Sauce

This home-made peanut sauce takes Thai Chicken Satay to a whole new level. The creamy coconut milk, toasted spices, and roasted peanuts add incredible flavor and depth to the sauce. I toast whole spices and grind them myself in a coffee grinder. There is a huge difference in the depth of flavor compared to pre-ground spices. It is a little bit of extra work, but it's the key to making this delicious peanut sauce and is definitely worth it.

If the list of ingredients seems too long, you can omit some of the spices and adjust the final taste.

Peanut Sauce Thai Style

Ingredients (yield about 1.25 to 1.5 cups of peanut sauce)

  • 6 cloves garlic

  • 2 shallots

  • 1 stalk of lemon grass, use bottom half

  • 1 tsp. minced fresh galangal, or substitute with 1/2 tsp. ground dried galangal

  • 2 tsp. minced cilantro roots, or substitute with bottom stems

  • 2 tsp. coriander seeds

  • 1/2 tsp. cumin seeds

  • 5 dried red chilies

  • 1/4 tsp. freshly ground nutmeg

  • 1/4 tsp. ground cinnamon

  • 1/4 tsp. ground mace

  • 1/2 to 1 tsp. shrimp paste (kapee)

  • 1/2 cup unsalted roasted peanuts

  • 1 1/2 to 2 cups (or 1 14-oz can) coconut milk

  • 1-2 Tbs Thai. fish sauce, to taste

  • 1-2 Tbs. palm or coconut sugar, to taste

  • 1 Tbs. tamarind water - dissolve a 1 tsp. chunk of wet tamarind in 1-2 Tbs. water


  1. Cut and discard the root tip of the garlic cloves and shallots, leaving the skin on. Roast on a tray in an oven at 400 degrees until softened (10-15 minutes for garlic and 20-30 minutes for shallots). When the roasted garlic and shallots cool down, peel roasted garlic and shallots and mashed in until well blended.

  2. Trim and discard the bottom tip and loose outer layer(s) of the lemon grass. Cut the stalk into very thin rounds, then chop. Mince the galangal and cilantro. Using a heavy mortar and pestle, or food processor/magic bullet, pound/grind the lemon grass, galangal and cilantro until reduced to a paste.

  3. In a small dry pan, toast the coriander seeds over medium heat until they are aromatic and dark brown, stirring frequently. Do likewise with the cumin seeds. Follow with the dried red chilies, stirring constantly until they turn a dark red color and are slightly charred. Grind these in a clean coffee grinder (reserved for spices) to a fine powder.

  4. Combine everything yield from steps #1 & 2 & 3. Then add the nutmeg, cinnamon, mace and shrimp paste. Pound/mix to make a well-blended spice paste.

  5. Grind the toasted peanuts in a clean coffee grinder or blender as finely as possible.

  6. Heat 2/3 cup of the thickest cream from the top of a can of coconut milk in a saucepan over medium-high heat. Reduce a few minutes until thick and bubbly. Fry the spice paste (as yield in step #4) in the cream, stirring frequently, until it is well mixed with the cream and has fully released its aromas and flavors (3-5 minutes).

  7. Add half the remaining coconut milk and the ground peanuts. Bring to a boil, then reduce heat to low and simmer 10-12 minutes, stirring well to blend. Add more coconut milk as needed to the consistency of pancake batter. Season to taste with fish sauce, palm sugar and tamarind water.

  8. Simmer a few minutes more, then transfer to a sauce dish and cool to room temperature before serving with your favorite grilled meats, fish, tofu and vegetables.

See here for the Chicken Satay recipe .

Some Facts about canned coconut milk:

* Fact one: coconut milk vs coconut water

Coconut milk (nohm gkati in Thai) is an essential ingredient for Thai curry, soup, and sweets. Coconut milk is extracted from the squeezed grated flesh of the mature nut and is not the water from inside of the coconut (which is usually discarded). Young immature green coconuts are the source of sweet coconut water, which is for drinking.

* Fact two: coconut milk for cooking vs coconut milk for dessert

Coconut milk has two types. One is labeled as “for cooking” (almost no sugar contained). The other type is labeled as “for dessert” (which contains a lot of sugar). You can check the Nutrition Facts label for the grams of sugar contained to compare.

* Fact three: thick coconut milk/coconut cream vs light/thin coconut milk

There are two grades of coconut milk: thick and thin. Thick coconut milk (called as coconut cream in some recipe) is prepared by directly squeezing grated coconut meat through a cheesecloth. The squeezed coconut meat is then soaked in warm water and squeezed a second or third time for thin coconut milk (called as light coconut milk in some recipe) . The difference between them is that thin coconut milk is of a 'pourable' consistency whereas thick coconut milk/coconut cream has an almost 'spreadable' consistency, and much more flavorful and creamier. This recipe calls for thick coconut milk/cream.

* Fact four: consistency of thick coconut milk/coconut cream

Good quality Thai-produced thick coconut milk/coconut cream has a thick, pudding like consistency, especially when the weather is cool/cold; you scoop it out of the can rather than pour it. Canned coconut milk usually has a layer (about 1/3 to ½ of the height of the can) of thick cream sitting on top of some thin milk This is why in this recipe it says “Heat 2/3 cup of the thickest cream from the top of a can of coconut milk ”)

Recipe slighted adapted from Peanut Satay Sauce