Objectives. To identify the factors that contribute to the under-resourcing of Aboriginal health and to explore the impact that funding arrangements have on the implementation of Aboriginal health policy. Design, settings and participants. Qualitative study based on 35 in-depth interviews with a purposive sample of frontline health professionals involved in health policy and service provision in the Northern Territory. Results. Participants described three factors that contributed to the under-resourcing of Aboriginal health: inefficient funding arrangements, mainstream programs being inappropriate for Aboriginal Australians, and competing interests determining the allocation of resources. Insufficient capacity within the healthcare system undermines the multilevel implementation process whereby organisations need to have the capacity to recognise new policy ideas, assess their relevance to their existing work and strategic plan and to be able to incorporate the relevant new ideas into day-to-day practice. Conclusion. Insufficient resources for Aboriginal health were found to be a barrier to implementing Aboriginal health policy. Inadequate resources result from the cumbersome allocation of funding rather than simply the amount of funding provided to Aboriginal healthcare. Monitoring government performance and ensuring the efficient allocation of funds would allow us to develop the delivery system for Aboriginal healthcare and therefore provide greater opportunities to capitalise on current interventions and future efforts. What is known about the topic? The extent to which Aboriginal health interventions are funded is variable, and the funding of the Aboriginal healthcare system is an important and topical issue. What does this paper add? The argument surrounding funding for Aboriginal health can be understood in several ways. Firstly, there is insufficient money being invested to address the need. By need we are referring to addressing community illness and injury as well as the need for a quality and accessible primary healthcare system. Secondly, there may be enough money being invested, but because of complicated and inflexible funding arrangements it is not being spent efficiently. Thirdly, there may be enough money invested, but not in effective interventions, and not in building the healthcare system, for example the local workforce. Finally, there may be enough money invested, but decisions about its distribution at the community level are not sufficiently in the control of communities. What are the implications for practitioners? To implement Aboriginal health policy, an effective delivery system is needed. Funding alone can be of limited value in achieving this aim over the long term unless it is used to build the capacity of a sustained delivery system for Aboriginal health care. Monitoring and facilitating government performance on how funds are invested, as well as the amount spent, is an important step towards the more effective implementation of Aboriginal health policy.