Recognition theory responds to political exclusion. It provides ways of thinking about the tension between universal liberal citizenship and the distinctive claims that indigenous peoples make with reference to prior occupancy and the universal right to self-determination. However, the complex and contested political questions that recognition theory examines are not easily answered. In this article, I propose Nancy Fraser’s participatory parity as a transformative, and not simply distributive, approach to recognition, which offers scope for substantive indigenous voice in state policy making. I use participatory parity to contest arguments that the meaningful recognition of indigenous peoples is not possible in liberal democracies like Australia and New Zealand. I argue that, instead, participatory parity complements the extant authority that indigenous peoples claim over their own affairs. This kind of recognition, through differentiated citizenship, means that indigenous peoples are simultaneously inside and outside the state. Recognition through participatory parity provides a foundation for self-determination. However, its full potential and moral acceptability to indigenous peoples depend on it being the genuine recognition of equals and on its capacity to provide reasons to accept the moral legitimacy of the state which may, for many indigenous people, be an unrealistic and unreasonable expectation.