Abstract: This paper examines developments and dilemmas in relations between local governments and indigenous Australians over the last quarter century. It establishes a framework for analysis based on differences in local government systems, circumstances and populations. It then examines two sets of developments in relations which have occurred in contrasting circumstances. The first is ongoing poor relations in incorporated local government areas, focusing on a complex of issues surrounding landownership, rates and services. The second is discrete predominantly Aboriginal or Torres Strait Islander communities in sparsely settled areas themselves becoming local governments. Both of these sets of developments are seen as being accompanied by significant dilemmas. In relation to the first, the major dilemma identified is how superordinate levels of government should best proceed in attempts to improve relations. In relation to the second, major dilemmas are identified relating to indigenous 'ownership' of the resulting local government structures and the weakness of the financial position of these newly emerging local governments. The paper suggests there have been some very significant and quite complex developments in relations between local governments and indigenous Australians over the last quarter century. However, these developments have only tentatively moved relations in a more positive direction, if indeed at all. Poor relations still predominate between local governments and indigenous Australians.