This study examines sentencing outcomes for Indigenous and non-Indigenous adult offenders convicted in the lower courts of South Australia, New South Wales and Western Australia between 2005 and 2007. The research examined whether the severity of penalty (imprisonment and monetary orders) or the magnitude of penalty (length of imprisonment term and amount of monetary order) differs between Indigenous and non-Indigenous offenders when they appear before the lower courts under similar circumstances. Analysis of the data showed that: Indigenous defendants were more likely than non-Indigenous offenders to be sentenced to prison; Indigenous defendants were less likely than non-Indigenous offenders to be sentenced to a monetary order; and Indigenous defendants were sentenced to monetary orders of a lesser amount than non-Indigenous offender. The consistent finding of harshness in the decision to imprison for Indigenous offenders raises important policy concerns. The pressure on lower court decision-making, and its consequent impact on Indigenous defendants, points to the need for the extension and development of strategies that allow more detailed and reliable information to be placed before magistrates at the time of sentencing.