The publication of a photograph of soldiers dressed as members of the Ku Klux Klan has prompted one Aboriginal man to come forward saying he was hounded out of the Army by racists.

The Defence Force is investigating allegations of racism in the Army, after the release of the photo, taken four years ago, which shows troops wearing white hoods standing behind Aboriginal soldiers.

A former trainee soldier who did not want to be identified has told ABC TV's "Lateline" program that the photograph is not an isolated incident of racism in the Army.

He says he faced racist taunts, and quit Army training after he was put alone in a prison cell and told to wait for a bell to ring.

"So the bell went off and the door opened," he said.

"They threw something in and then the door closed and when I looked down and saw what they threw in, it was a noose.

"It was a rope made into a noose and yeah I was pretty upset by that at that time.

"I know people who've actually lost their lives - Aboriginal people who've been hung."

The family of Aboriginal soldier Damien Palmer says he hanged himself after enduring months of racist abuse.

Chief of the Army, Lieutenant General Peter Leahy, says there has already been one inquiry into the 'Klan' photograph.

"You have to understand that the photograph was taken in 2000," he said.

In early 2003 a complaint was made. As a normal part of the posting process, one officer was promoted and others have been moved and promoted.

"Now we've had a look at it, we've taken what we think is appropriate action.

"The second investigation, though, will review the appropriateness of that action, as well as deal with some other allegations."