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Background: The consumption of ultra-processed foods is associated with diminished dietary quality and adverse health outcomes. The Australian Health Star Rating (HSR) is a nutrient-based front-of-pack (FOP) labelling system that assesses the 'healthiness' of foods on a scale of 0.5 to 5 stars based on their content of 'risk' and 'positive' nutrients. This study aimed to analyse the use of health stars on new packaged food products entering the Australian marketplace by level of food processing. Methods: The Mintel Global New Product Database (GNPD) was searched to identify the number of stars displayed on the labels of all new packaged food products participating in the HSR system released into the Australian retail food supply between 27 June 2014 (the endorsement date) and 30 June 2017. Products were categorised by the four NOVA food processing categories: unprocessed and minimally processed (MP), processed culinary ingredients (PCI), processed (P), and ultra-processed (UP), and the distribution of the star ratings within each category was compared and analysed. Results: The majority of new food products displaying an HSR were UP (74.4%), followed by MP (12.5%), P (11.6%), and PCI (1.5%). The median HSR of MP products (4.5) was significantly higher than the median of P (4) and UP products (3.5) (all p < 0.05). In all NOVA categories HSR profiles were distributed towards higher star ratings, and the majority (77%) of UP products displayed an HSR ≥ 2.5. Conclusions: The HSR is being displayed on a substantial proportion of newly released UP foods. Technical weaknesses, design flaws and governance limitations with the HSR system are resulting in 3 out of 4 instances of these UP foods displaying at least 2.5 so-called 'health' stars. These findings add further evidence to concerns that the HSR system, in its current form, is misrepresenting the healthiness of new packaged food products and creating a risk for behavioural nutrition. [ABSTRACT FROM AUTHOR]