The recently launched Australian Curriculum Health and Physical Education has five propositions, one of which is for students to adopt a critical inquiry approach within this subject area. In particular, students are encouraged to explore issues that relate to social power and taken-for-granted assumptions. This paper problematizes the concept of ‘biological race’ as one such assumption at three government high schools in Canberra, Australia’s national capital. This study found that Indigenous students at the three schools experience racialization both from their health and physical education (HPE) teachers and from their non-Indigenous peers. Figurational sociology was used to show that this racialization is a characteristic of power relationships in the physical education and school sport figuration examined. The findings presented are important because they show that HPE teachers perpetuate the myth of ‘biological race’. Further, this fantasy of ‘biological race’ restricts opportunities for Indigenous students and is an obstacle for reconciliation between Indigenous and non-Indigenous Australians.