The Australian Aboriginal and Torres Strait Islander population more than doubled in size between 1996 and 2016. Growth was highest in urban areas and lower in rural and remote areas. An important contributor to growth was identification change, whereby individuals report their Aboriginal status differently over time. Official population projections in Australia currently do not incorporate this phenomenon, leading to underestimation of future populations which affects policies, targets and planning for demand-based services. We outline a new projection model to improve subnational estimates of future regional population growth by endogenizing identification change and Aboriginal/non-Aboriginal childbearing. Results suggest that growth will be higher than currently projected, especially in urban-dominated regions in New South Wales and Queensland where identification change is projected to account for more than 50% of growth. There will also be considerable population ageing, which has implications for services and policies relevant to Aboriginal and Torres Strait Islander people.