The 34-year-old took out the $100,000 prize for her self-portrait What I Assume You Shall Assume.
The work depicts the artist standing naked in the Belanglo State Forest, where the infamous backpacker murders took place, and is a part of a series.
Lowry says this is the first major art competition she has entered.
'I'm more interested in just exploring that kind of paranoia that sits within the landscape, specifically the Belanglo State Forest,' she said after accepting the prize.
The Doug Moran National Portrait Prize is Australia's richest. It is in its 20th year.
Meanwhile, Adelaide photographer Belinda Mason has won the $50,000 Moran Contemporary Photographic Prize.
Her work, titled Four Generations, was chosen from more than 3,000 entries.
This year's finalists will be on display at the New South Wales State Library until May 4.
Text and image by ABC.net, Australia