Since the 1971 Census, the Australian Aboriginal and Torres Strait Islander (Indigenous) population has grown faster than predicted by births, deaths and migration. An important and likely source of this unexplained growth is identification change, where a person changes how they identify or are identified by the household between one census and the next. In this paper, we use the Australian Census Longitudinal Dataset to detect identification change between 2006 and 2011 and include this information in a multistate population projection model. The projection model is applied to Australia, New South Wales and the Northern Territory over the period 2011–2061. The results indicate that identification change, particularly in the youngest age groups (0–9 years), had a positive impact on Indigenous population growth between 2006 and 2011. The projected Indigenous population initially grows faster than otherwise due to a net increase in people identifying as Indigenous, but slows as it interacts with the slow-growing non-Indigenous population. The results also suggest that the way in which identification change is modelled substantially affects projected trajectories, particularly in areas where identification change is substantial. While demographic modelling would benefit from further multidisciplinary research on the drivers and populations at risk of Indigenous status change, this study underscores the importance of incorporating identification change to improve projections of the Indigenous population in Australia.