Remote sensing and satellite geodetic observations are capable of hydrologic monitoring of freshwater resources. Although satellite radar altimetry has been used in monitoring water level or discharge, its use is often limited to monitoring large rivers (>1 km) with longer interval periods (>1 week) because of its low temporal and spatial resolutions (i.e., satellite revisit period). Several studies have reported successful retrieval of water levels for small rivers as narrow as 40 m. However, processing current satellite altimetry signals for such small water bodies to retrieve water levels accurately remains challenging. Physically, the radar signal returned by water bodies smaller than the satellite footprint is most likely contaminated by non-water surfaces, which may degrade the measurement quality. In order to address this scientific challenge, we carefully selected the waveform shapes corresponding to the range measurement resulting from standard retrackers for the European Space Agency's (ESA's) Envisat (Environmental Satellite) radar altimetry. We applied this approach to small (40-200 m in width) and medium-sized (200-800 m in width) rivers and small lakes (extent <1000 km2) in the humid tropics of Southeast Asia, specifically in Indonesia. This is the first study that explored the ability of satellite altimetry to monitor small water bodies in Indonesia. The major challenges in this study include the size of the water bodies that are much smaller than the nominal extent of the Envisat satellite footprint (e.g., ~250 m compared to ~1.7 km, respectively) and slightly smaller than the along-track distance (i.e., ~370 m). We addressed this challenge by optimally using geospatial information and optical remote sensing data to define the water bodies accurately, thus minimizing the probability of non-water contamination in the altimetry measurement. Considering that satellite altimetry processing may vary with different geographical regions, meteorological conditions, or hydrologic dynamic, we further evaluated the performance of all four Envisat standard retracking procedures. We found that satellite altimetry provided a good alternative or the only means in some regions of measuring the water level of medium-sized rivers and small lakes with high accuracy (root mean square error (RMSE) of 0.21-0.69 m and a correlation coefficient of 0.94-0.97). In contrast to previous studies, we found that the commonly used Ice-1 retracking algorithm was not necessarily the best retracker among the four standard waveform retracking algorithms for Envisat radar altimetry observing inland water bodies. As a recommendation, we propose to include the identification and selection of standard waveform shapes to complete the use of standard waveform retracking algorithms for Envisat radar altimetry data over small and medium-sized rivers and small lakes.