diff --git a/CHANGES.md b/CHANGES.md
index 5065728c..c5742723 100644
--- a/CHANGES.md
+++ b/CHANGES.md
@@ -5,6 +5,8 @@
 ### Bug fixes
 
 -   Fix int32 overflow when reading int64 columns (#260)
+-   Fix `fid_as_index=True` doesn't set fid as index using `read_dataframe` with
+    `use_arrow=True` (#265)
 
 ## 0.6.0 (2023-04-27)
 
diff --git a/pyogrio/_io.pyx b/pyogrio/_io.pyx
index 9065904c..8371261c 100644
--- a/pyogrio/_io.pyx
+++ b/pyogrio/_io.pyx
@@ -1164,6 +1164,12 @@ def ogr_open_arrow(
 
         geometry_name = get_string(OGR_L_GetGeometryColumn(ogr_layer))
 
+        fid_column = get_string(OGR_L_GetFIDColumn(ogr_layer))
+        # OGR_L_GetFIDColumn returns the column name if it is a custom column,
+        # or "" if not. For arrow, the default column name is "OGC_FID".
+        if fid_column == "":
+            fid_column = "OGC_FID"
+
         # Apply the attribute filter
         if where is not None and where != "":
             apply_where_filter(ogr_layer, where)
@@ -1212,6 +1218,7 @@ def ogr_open_arrow(
             'fields': fields[:,2], # return only names
             'geometry_type': geometry_type,
             'geometry_name': geometry_name,
+            'fid_column': fid_column,
         }
 
         yield meta, reader
diff --git a/pyogrio/_ogr.pxd b/pyogrio/_ogr.pxd
index 1cadc2ed..88f12d9d 100644
--- a/pyogrio/_ogr.pxd
+++ b/pyogrio/_ogr.pxd
@@ -278,6 +278,7 @@ cdef extern from "ogr_api.h":
     OGRErr                  OGR_L_CreateFeature(OGRLayerH layer, OGRFeatureH feature)
     OGRErr                  OGR_L_CreateField(OGRLayerH layer, OGRFieldDefnH fielddefn, int flexible)
     const char*             OGR_L_GetName(OGRLayerH layer)
+    const char*             OGR_L_GetFIDColumn(OGRLayerH layer)
     const char*             OGR_L_GetGeometryColumn(OGRLayerH layer)
     OGRSpatialReferenceH    OGR_L_GetSpatialRef(OGRLayerH layer)
     int                     OGR_L_TestCapability(OGRLayerH layer, const char *name)
diff --git a/pyogrio/geopandas.py b/pyogrio/geopandas.py
index a69ddb14..ef7de377 100644
--- a/pyogrio/geopandas.py
+++ b/pyogrio/geopandas.py
@@ -167,6 +167,9 @@ def read_dataframe(
     if use_arrow:
         meta, table = result
         df = table.to_pandas()
+        if fid_as_index:
+            df = df.set_index(meta["fid_column"])
+            df.index.names = ["fid"]
         geometry_name = meta["geometry_name"] or "wkb_geometry"
         if geometry_name in df.columns:
             df["geometry"] = from_wkb(df.pop(geometry_name), crs=meta["crs"])
diff --git a/pyogrio/tests/test_arrow.py b/pyogrio/tests/test_arrow.py
index c4e66649..cebcaf1b 100644
--- a/pyogrio/tests/test_arrow.py
+++ b/pyogrio/tests/test_arrow.py
@@ -7,7 +7,7 @@
 
 try:
     import pandas as pd
-    from pandas.testing import assert_frame_equal
+    from pandas.testing import assert_frame_equal, assert_index_equal
     from geopandas.testing import assert_geodataframe_equal
 except ImportError:
     pass
@@ -33,16 +33,13 @@ def test_read_arrow(naturalearth_lowres_all_ext):
 
 
 def test_read_arrow_fid(naturalearth_lowres_all_ext):
-    result = read_dataframe(
-        naturalearth_lowres_all_ext, use_arrow=True, fid_as_index=True
-    )
+    kwargs = {"use_arrow": True, "where": "fid >= 2 AND fid <= 3"}
 
-    if naturalearth_lowres_all_ext.suffix == ".gpkg":
-        fid_col = "fid"
-    else:
-        fid_col = "OGC_FID"
+    df = read_dataframe(naturalearth_lowres_all_ext, fid_as_index=False, **kwargs)
+    assert_index_equal(df.index, pd.RangeIndex(0, 2))
 
-    assert fid_col in result.columns
+    df = read_dataframe(naturalearth_lowres_all_ext, fid_as_index=True, **kwargs)
+    assert_index_equal(df.index, pd.Index([2, 3], name="fid"))
 
 
 def test_read_arrow_columns(naturalearth_lowres):