The well-being of Indigenous people in Australia and throughout the world is linked to the use and value of natural resources. This research analyses the current well-being approach applied to measure well-being of Indigenous Australians. It reports findings from three case studies in Queensland on Indigenous people's values and concerns and their capabilities in relation to natural systems. It applies a holistic approach based upon the Millennium Ecosystem Assessment and Sen's capability approaches and proposes an integrated well-being model by incorporating intangible values such as cultural and identity values, that are linked to people's capabilities involving natural systems. It provides a novel way of understanding the role of natural resources in Indigenous well-being by associating natural resources with people's capabilities. The study suggests transforming the present concept of well-being and its measures for incorporating people's capabilities that can effectively inform future policy decision making.