The Community Development Employment Projects (CDEP) scheme provides a small proportion of Indigenous employment in major Australian cities and is a relatively minor source of employment in other urban areas, especially for females. The converse of this is that the CDEP is a major source of employment in rural and remote areas with about one half of all jobs being generated by the scheme. Smaller urban areas outside the major cities lie somewhere in between these two extremes with about one-fifth of employment originating in the scheme. Stating that the dominance of the CDEP scheme in certain regions complicates the interpretation of any analysis of Indigenous employment, this paper argues that the factors underlying Indigenous employment should be examined separately for areas where the CDEP scheme is relatively prominent. The 1994 National Aboriginal and Torres Strait Islander Survey (NATSIS) and census data between 1981 and 1996 are used to highlight potential biases in the effects of educational attainment (and other factors) on employment prospects of Indigenous and non-Indigenous populations. The paper concludes with a discussion of the implications of results for policy and future research.