The inquiry will investigate the nature and prevalence of racism experienced by Aboriginal and Torres Strait Islander people, while also considering the threat posed by ideologically motivated extremism.
Leaders have been demanding a stronger response from government officials following the alleged attempted bombing of an Invasion Day protest in Perth on January 26.
More than 2500 people were evacuated from the protest after a 31-year-old man allegedly threw an object containing volatile chemicals, nails and metal ball bearings into the crowd.
The devise did not detonate despite a fuse allegedly being lit.
Just months earlier, a large group of men dressed in black stormed Camp Sovereignty, an Aboriginal protest camp at Kings Domain in Melbourne after attending an anti-immigration protest.
Multiple men, including self-confessed white nationalist Thomas Sewell, allegedly lashed out at people at the camp, the site of remains of Indigenous people from 38 clans.
Indigenous Australians Minister Malarndirri McCarthy said First Nations people are feeling scared and angry following the alleged attacks.
"I know this has been a difficult time for families and communities. This inquiry ensures they can have their say and their experiences will be heard by the parliament," the NT senator said.
"I regularly hear from Aboriginal and Torres Strait Islander people that they are facing increasing hate and racism, especially online. We must stand up against racism in all its forms."
The inquiry will examine ways to reduce harm from racism, hatred and violence, including systemic racism, the role of online platforms, and efforts to combat discrimination.
Committee chairwoman and Senator Jana Stewart said Aboriginal and Torres Strait Islander people deserved to live free from racism, hate and violence.
"This inquiry is an important opportunity to understand the nature, prevalence and impact of racism in our communities and to identify practical actions for combatting racism and reducing individual and collective harm," the Mutthi Mutthi and Wamba Wamba woman said.
"If we are serious about community safety, we must confront the environment in which hatred grows."
Community members, including Aboriginal and Torres Strait Islander peoples, are invited to make submissions on ways to create safer and more respectful environments until May 1.
The inquiry is set to deliver its report in September.
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