The findings come from a University of Sydney study looking at the experiences of almost 21,000 lung cancer patients in NSW.
The study shows that Aboriginal and Torres Strait Islander people in remote areas are almost eight times more likely to die from the disease, a rate much higher than the previously thought disparity of around two times.
The research compared Indigenous people to other groups in similar socio-economic and geographic circumstances and found they were more likely to suffer worse outcomes.
"When we stratified for incidence by socio-economic disadvantage, Aboriginal and Torres Strait Islander people were more than four times likely to receive a lung cancer diagnosis and also die from their lung cancer," lead researcher Kalinda Griffiths told AAP.
"When we stratified by geographical remoteness, both incidence and mortality were more than eight times more likely. We knew the disparity was large, but we hadn't identified the full extent of the issue."
Ms Griffiths speculates a lack of trust in the healthcare system and a lack of culturally appropriate care may make some Indigenous people reluctant to seek treatment.
Lung cancer is one of the most commonly diagnosed cancers for Indigenous Australians, who have high rates of smoking.
Ms Griffiths said previous studies usually reported only on Indigenous status and failed to consider actual circumstances.
The research highlighted the need have more targeted policy directives, she said.
"If we do things through this intersectional approach, it can give us really important information about those people in Australia who are in the greatest need," Ms Griffiths said.