According to the 2006 Census, around three-quarters of Indigenous Australians live in regional areas or major cities. This represents a small, but noticeable increase from previous census years, especially in large regional towns. While most measured socioeconomic outcomes are advantageous relative to remote parts of the country, there are still substantial gaps between Indigenous and non-Indigenous Australians in regional and urban Australia. This paper focuses on which cities and large towns Indigenous Australians live in, how the Indigenous population is distributed by neighbourhood within these cities and towns, and what the characteristics of the neighbourhoods are in which Indigenous Australians are concentrated. The paper is part of a larger body of analysis looking at the circumstances and policy challenges facing Indigenous Australians in urban areas. Future work will consider the processes that result in residential segregation, the effects it has on individual outcomes (positive and negative) and the most appropriate policy responses. (Abstract.)