Introduction: Aboriginal and Torres Strait Islander peoples (hereafter respectfully termed Indigenous Australians) experience a 3-fold increased risk of acute rejection after transplantation compared to non-Indigenous Australians. We investigated whether acute rejection explains the association between Indigenous status, infection-related deaths, and all-cause deaths after kidney transplantation, and whether acute rejection mediates the relationship between Indigenous status and overall graft loss. Methods: This cohort study included all recipients who received their first kidney transplant between 2005 and 2018 in Australia, using data from the Australia and New Zealand Dialysis and Transplant registry. Multivariable Cox regression models determined the associations between Indigenous status, graft loss, infection-related deaths, and all-cause deaths. Mediation analyses examined if acute rejection mediated these relationships. Primary outcome was infection-related death. Secondary outcomes included all-cause death and overall graft loss. Results: There were 9993 patients (n = 390 (3.9%) Indigenous Australians) who received a kidney transplant between 2005 and 2018, and they were followed-up with for 56,876 patient-years. A total of 1165 died (12%) (211 infection-related deaths) and 1957 (20%) lost their allografts. Compared with non-Indigenous recipients, the adjusted hazard ratio (HR) (95% confidence interval [CI]) for graft loss, infection-related deaths and all-cause deaths among Indigenous Australians were 2.27 (1.90–2.71), 3.01 (1.90–4.77) and 2.36 (1.89–2.94), respectively. The mediation analysis showed the association between Indigenous status and graft loss (but not infection-related death or all-cause death) was partially mediated by acute rejection (1.06 [1.03–1.09]), and the proportion of effects mediated by acute rejection was 0.10. Conclusion: Indigenous Australians experienced a higher risk of graft loss, a relationship mediated partially through acute rejection. The higher risk of infection-related death was independent of acute rejection.