We present first results for the masses of positive and negative parity excited baryons calculated in lattice QCD using an O(a^2)-improved gluon action and a fat-link irrelevant clover (FLIC) fermion action in which only the irrelevant operators are constructed with APE-smeared links. The results are in agreement with earlier calculations of N^* resonances using improved actions and exhibit a clear mass splitting between the nucleon and its chiral partner. An correlation matrix analysis reveals two low-lying J^P=(1/2)^- states with a small mass splitting. The study of different Lambda interpolating fields suggests a similar splitting between the lowest two Lambda1/2^- octet states. However, the empirical mass suppression of the Lambda^*(1405) is not evident in these quenched QCD simulations, suggesting a potentially important role for the meson cloud of the Lambda^*(1405) and/or a need for more exotic interpolating fields.