Objective: There is limited research available regarding the prevalence rates of psychiatric illness in Indigenous Australians, and the available literature varies widely in terms of methods and findings. Culturally valid and appropriate tools are needed to ensure accurate outcomes. The purpose of this review is to examine the methods used to diagnose psychiatric disorders in Indigenous Australians and identify whether these are culturally appropriate or valid. Method: A systematic search of available literature was undertaken in electronic databases (PubMed, Scopus, PsycInfo, PsycArticles, Web of Science, Medline, and Informit Health Indigenous Australians Peoples Collections). Narrative synthesis was used to analyse the data obtained, with a quantitative evaluations of study quality and cultural validity. Results: Twelve articles were included for review. Six studies were of diagnostic tools and none had been validated for use with Indigenous Australians. Another six used practitioner assessment. Some studies indirectly referenced cultural competence on behalf of the practitioner, but again on the whole this was lacking. Conclusions: Further validation of the use of diagnostic instruments in Indigenous Australians is needed so that the prevalence of psychiatric disorders in this population can be accurately determined. In addition, practitioners working with Indigenous Australians should have some training in cultural awareness or competence, and consider the cultural appropriateness of diagnostic tools when applied to this population.