The admission came after the ABC obtained a report from the Afghanistan Independent Human Rights Commission (AIHRC) that stated five civilians had been killed and six wounded during the protest near the forward operating base in Uruzgan province in 2010.
But after the ABC asked Defence about the AIHRC's report of a higher civilian death toll, a spokesperson confirmed an Australian soldier shot at protesters.
Asked by the ABC whether any Australian troops had opened fire with live rounds during the protest, Defence said: "Coalition soldiers, including an Australian, engaged the protesters in self-defence."
At the time of the incident, the Australian Defence Force issued a statement saying that Australian troops, coalition forces and members of the Afghan National Army had helped defend the base.
The NATO-led International Security Assistance Force also issued a statement that said an ISAF service member shot the man in accordance with the rules of engagement.