The methods used by the Australian Bureau of Statistics (ABS) to estimate life expectancies of Aboriginal and Torres Strait Islander peoples in 2009 have been controversial and require critical and sensitive analysis. The introduction by ABS of the direct method for estimating Indigenous life expectancies, based on estimated deaths and populations, has been generally welcomed. But the way this method has been applied and, in particular, death estimates used by the ABS, warrant scrutiny. These estimates were based on a first ever linkage between Indigenous deaths and census records following the 2006 census. Census-based identification was used in place of identification in the death registrations, rather than as a supplementary data source. The various national, state and regional life expectancy estimates published may have been biased upwards by this process. Because the impact of the methodology varies across Australia, regional differentials reported appear substantial but are not soundly based. The questionable ABS results are highlighted and discussed. Analysis based on more comprehensive linkage of death records in New South Wales over 5 years suggests that the ABS methods have understated Indigenous deaths and so overstated life expectancy. The effect of an alternative ABS approach is also discussed. ABS estimates published in 2009 are not necessarily definitive and may well overestimate Aboriginal and Torres Strait Islander life expectancy and underestimate the life expectancy gap. Estimates should be based on accurate estimates of deaths and population. Consultation and a thorough review are essential before the next round of estimates following the findings of the 2011 population census. Closing the Gap commitments focus on eliminating the life expectancy gap between Aboriginal and Torres Strait Islander peoples and other Australians. Life expectancy estimates need to be based on methods and data that are well understood and broadly supported. The alternative is unproductive debate about statistics rather than the range of policies and resourcing issues needed to improve Indigenous health.