Australia and its Indigenous peoples have experienced what one commentator has called “a juxtaposition of first and third worlds”, manifest, among other aspects, in lower levels of education achievement compared with other Australians. Specifically, profound levels of educational inequality have been observed for Aboriginal Australians because of the colonial experience, and this has resulted in on-going challenges in terms of their collective histories. This paper examines the interrelationship between Indigeneity and socioeconomic status (SES) in the primary school years, and analyzes the association between a school’s location, levels of segregation, school SES and literacy and numeracy achievement. I argue that relatively high levels of school segregation and clustering structure and maintain Indigenous children’s inequality in schooling outcomes in socioeconomically disadvantaged communities. Characteristics of low SES neighbourhoods and schools are examined, using 2011 Population Census and National Assessment Program–Literacy and Numeracy (NAPLAN) data to assess the effect on reading and numeracy mean achievement levels of Year 5 students in schools across several states. Analyzes of the data demonstrate relationships between school socioeconomic composition and school segregation, and have important implications for Indigenous people in a majority of low SES communities.