Discussions are currently underway as to how to enable Indigenous people to optimise benefits from native title agreements or Indigenous Land Use Agreements (ILUAs). Research on a range of agreements between Indigenous people and extractive industries suggests that equitable benefits from such activity on Indigenous land are rare. In Central Australia the Central Land Council has piloted a new approach to generating benefits from land use agreements by establishing a Community Development Unit and encouraging traditional owners to incorporate funding for community development activities into their land use agreements. This paper discusses the variety of community development projects this unit is undertaking with traditional owners, and the challenges it is facing as it tries to utilise community development principles in its projects. It indicates some of the issues that may need to be considered in policy which seeks to assist native title holders gain optimum benefit from their ILUAs. In particular, the paper will demonstrate that the priorities of Indigenous people to live on outstations and to sustain cultural activities may conflict with government views as to how to ‘optimise benefits’ from ILUAs.