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Abstract Background Together with addressing social determinants of health, culturally safe healthcare provision is essential for closing the health outcomes gap experienced by Aboriginal and Torres Strait Islander (Indigenous) Australians. Rural placements potentially provide students of the health professions with opportunities to enhance their knowledge and skills regarding cultural safety. We used rural placements data systematically collected from allied health students, including commencement- and end-of-placement questionnaire responses, to investigate the determinants of confidence in working with Indigenous people. Methods The study comprised data from all students who provided survey data at both commencement and end of their first placement directly supervised by the administering University Department of Rural Health during the period 2019–2022. Five-point ordered responses to the question ‘How confident do you feel about working with Aboriginal people?’ were used to assess student and placement-related determinants of confidence (Confident/Very confident versus other) at baseline and increased confidence (≥ 1 point) during the placement using crude and adjusted multivariable robust Poisson regression. Results Participating students (N = 489) were from diverse allied health disciplines (including pharmacy n = 94, 19.2%; chiropractic n= 66, 13.5%; physiotherapy n= 65, 13.3%; social work n = 59, 12.1%; and occupational therapy 58, 11.9%). Confidence in dealing with Aboriginal people was lower at commencement among females compared with males (adjusted relative risk [aRR] 0.65; 95% confidence interval [CI] 0.53–0.80), and higher among students of Australian rural origin compared with others (aRR 1.49; CI 1.22–1.83) and those who reported previous experience working with Indigenous people compared with those reporting none (aRR 1.40; CI 1.14–1.72). Placement attributes associated with increased confidence working with Indigenous people between placement commencement and end were interaction with Indigenous people within the placement (aRR 2.32; CI 1.24–4.34), placement model reflecting more structured academic supervision (aRR 1.18; CI 1.02–1.37), and placement length (aRR per additional day 1.002; CI 1.001–1.004). These associations were robust to modelling that accounted for a ceiling effect on increased confidence. Conclusions While influenced by students’ demographic attributes and prior experiences, confidence of allied health students in working with Indigenous people is enhanced during rural placements, particularly through direct contact with Indigenous people.