Background: Although rates of common mental disorders (CMD) are acknowledged to be high among community-living Indigenous Australians, the data are derived from self-report. Rates among remote residents are half of those living elsewhere. Community-based prevalence rates of CMD derived from diagnostic interviews have not been available.

Objectives: To determine whether Indigenous Australians living as majorities on traditional lands (‘Reserve’ populations) or in remote areas have lower rates of current CMD than those living as minorities in mainstream communities.

Methods: Cross-sectional study (July 2014 to November 2016) involving Aboriginal Medical Service (AMS) clients (n = 420), community residents (n = 54) and Reserve residents (n =70). Psychologists conducted a Structured Clinical Interview for Diagnostic and Statistical Manual of Mental Disorders, fourth edition (DSM-IV) assessments.

Findings: The standardized rates (95% confidence interval (CI)) of current CMD were 45.9% (38.8, 47.7) among AMS clients and 37.5% (32.2, 42.8) among community residents, 4.6-fold and 3.7-fold higher, respectively, than those of the Australian population (2007 National Survey of Mental Health and Well Being). Among Reserve residents, the rate was 25.4% (20.7, 30.2). Only 5.5% (3.0, 8.0) of Reserve residents had a mood disorder, one-third the rate of the other two groups. Among a small subgroup (n = 25) of the n = 544 cohort who resided in remote areas, the rate of current CMD was 7.5% (4.6, 10.3).

Conclusions: The prevalence of current mental disorders in this Indigenous population is substantially higher than previous estimates. The much lower rates among reserve and remote residents point to the importance of Indigenous peoples’ connection to their traditional lands and culture and a potentially important protective factor.