Indigenous Australians in the Community Development Employment Projects (CDEP) scheme have been working for welfare payments since 1977. One of the objectives of the scheme is to assist Indigenous Australians develop work skills which lead to 'mainstream' employment. This paper uses a case study of a CDEP scheme in Port Augusta, a regional centre in South Australia, to analyse the success of the scheme as a stepping stone to unsubsidised employment in regional centres and urban areas. The research demonstrates that the scheme can be a stepping stone to 'mainstream' employment for participants wishing to make this move. It also provides an opportunity for participants who do not wish to find employment to undertake useful work in an environment that allows them to balance cultural and family commitments with the demands of employment. The factors underpinning the movement to 'mainstream' employment are identified. The paper concludes with some of the policy issues arising from this research.