Previous research in Perth, Western Australia, finds a disturbing amount of prejudice against Indigenous Australians. At the forefront of much prejudice research has been the distinction between old-fashioned and modern prejudice. We constructed an Attitude Toward Indigenous Australians scale from items originating from qualitative data. We found that negative attitudes were predicted by collective guilt about past and present wrongs to Indigenous Australians (collective guilt directly linked to Indigenous issues, as well as collective guilt generally). Negative attitudes were also predicted by a lack of empathy for Indigenous Australians, and affective perspective taking generally. Socio-demographics (e.g. a lack of education) predicted negative attitudes, which indicate the necessity of taking both social-psychological and socio-demographic factors into account when examining the nature of prejudice. A number of practical implications arise from these findings. Copyright © 2004 John Wiley & Sons, Ltd.