An airbag apparatus according to the present invention includes a gas generator and an airbag. The airbag includes a panel sheet and a recess defined inwardly with respect to the airbag. The airbag is formed in a bag-like shape by folding the panel sheet in two and sewing the circumference of the panel sheet. The panel sheet has a first folding line and an inward folding portion including a line extending from the first folding line and arranged in a circumferential portion of the panel sheet. The inward folding portion includes a second folding line by which the inward folding portion is defined, a third folding line extending along the line extending from the first folding line, and an insertion opening through which the gas generator is inserted into the airbag. The recess is provided by folding the inward folding portion along the second folding line inwardly with respect to the airbag, re-folding the airbag in two along the third folding line, and sewing the circumference of the inward folding portion together with the circumference of the panel sheet.