S. formosa's ecology is not fully described, but it is known to feed on small insects and larvae found on the trunks and epiphyte-covered branches of trees in its range.

Its apparent localization within its range makes rigorous estimates of its population difficult, but its habitat is threatened by deforestation and the species appears to be in decline.

The nuthatches constitute a genus – Sitta – of small passerine birds in the family Sittidae,[3] typified by short, compressed wings and short, square 12-feathered tails, a compact body, longish pointed bills, strong toes with long claws, and behaviorally, by their unique head-first manner of descending tree trunks.

[13][14] In 2014, Eric Pasquet, et al. published a phylogeny based on examination of nuclear and mitochondrial DNA of 21 nuthatch species.[fn.

Under the wing, the white base of the primary coverts contrasts sharply with gray undertail-coverts; a distinguishing trait when viewing the bird in flight.

The iris is reddish-brown or dark brown and the bill is black but for a whitish tinge at the base of the lower mandible.

Other foraging flock partners surveyed are the long-tailed broadbill (Psarisomus dalhousiae), the lesser racket-tailed drongo (Dicrurus remifer), the maroon oriole (Oriolus traillii) and the white-browed scimitar babbler (Pomatorhinus schisticeps).

As compared with other nuthatch, the species has been described as working "unhurriedly",[19] as they peck at trunks, lichen and other epiphytes, searching for prey.

[12] Beautiful nuthatch sexes are reported to share equally in nest building and incubation duties.

[20] This species lives in the eastern Himalayas, and has been reported in several scattered sites across Southeast Asia, in the northwest of Vietnam and in central Laos.

[19] It is present in Bhutan, and in the Indian states of Sikkim (in the town of Rangpo), in Meghalaya (in the Khasi Hills), in Assam (in the Dima Hasao district), in the south of Arunachal Pradesh, and in Manipur and Nagaland.

Data on the bird from Laos is erratic, but there are reports of sightings north of Phou Kobo, and of large numbers of the species wintering in the center of the country in the pristine wilderness of Nakai–Nam Theun.

[21] Beautiful nuthatches typically inhabit both the interior and outskirts of evergreen or semi-evergreen montane forest, though in northern Burma they have been recorded nesting in trees scattered across open areas.

[17] The beautiful nuthatch has always been rare and very localized throughout its distribution,[19] perhaps due to very specific ecological requirements, though this has been questioned as not in keeping with the diversity of habitats in which S. formosa has been observed.

[18][19] Although the species is less threatened at high elevations, its habitat has been reduced by deforestation, due to logging and forest clearance to make way for human habitation.

[17][19] In the center of Laos and northern Vietnam, Fokienia trees, which are a known beautiful nuthatch foraging source and nesting site, are harvested for their high commercial value.