Detective Grant Miller, of Queenstown, said police were investigating an incident involving a woman in her late 20s who was walking on Gorge Rd, between Robins Rd and Hylton Pl, at 3.50am on Sunday.
He told the Otago Daily Times officers were reviewing video footage, helped by local businesses.
``We have identified a male acting suspiciously in the area after the [alleged] incident. She [the victim] walks out of camera view and you can see a male walking away from her, who then turns to run back towards her off-camera.''
Det Miller said the alleged attacker ducked into a car yard and hid as several vehicles drove up the road.
``He came out with a jacket over his head and ran off again.''
While he stressed Queenstown was generally a safe place, he urged people to be alert and ``aware of their surroundings'' in the early hours of the morning.
The woman was walking home from a function when she was approached and indecently assaulted by a man.
He has been described by police as Asian, in his mid-20s, 170cm tall, clean shaven with black hair, wearing a dark jacket with a light-coloured top underneath, long pants and sneakers.
Anyone with information is asked to contact Det Miller on 021 191 5352 or make an anonymous report by calling Crimestoppers on 0800 555 111.