Aboriginal people are by far more, over represented in the judicial system than any other group of people in Australia. This is a growing problem as incarceration rates are on the rise. This thesis has looked to institutional racism as an explanation for this gross over representation. This thesis has attempted to show the relationship between institutional racism and individual racism. Furthermore, this thesis has looked at values that are embedded in Western society. The value systems from this Western society have been compared to the values systems of Aboriginal society to show that these societies have different understandings and different perceptions. This research study has adopted a qualitative approach as a methodology and six in-depth interviews were used to gain original data of the participants' perceptions on Institutional racism and incarceration. The participants were all from the Nowra, Shoalhaven Aboriginal community. A thematic analysis was adopted to extract the themes from the interviews. The findings proved to be important, as all of the participants felt that they had been affected by Institutional racism as well as racism. The findings of the study complemented the findings in the literature.