Published data that describe the subjective well‐being (SWB) of Indigenous people across Australia are scarce. This study reports differences in the SWB of 3 sample groups–mainstream Australian adults, Indigenous adolescents, and non‐Indigenous adolescents–in 5 geographic areas classified by remoteness. Both groups of adolescents were participating in a national program for disengaged youth. Consistent with results from general population samples, the SWB for people living in rural centers was higher than for those in either major cities or very remote areas. This suggests that there may be an optimum size of community that acts as a buffer to the well‐being of both Indigenous and non‐Indigenous adolescents and adults. This may be achieved through greater community connection, as well as having a reasonable level of amenities available. The results of this study are likely relevant to Indigenous populations in other countries, and the implications of these findings for service delivery are discussed.