Its natural habitat is submontane and montane forests with open spaces[4] and is distributed throughout oriental Asia.

On the first capture, the individual was 56 days old and showed fledgling colour morph stage; having less spots and barring on the back and top of the head and not having a completely formed occipital.

On the second recapture, the individual was captured 165 days after hatching and demonstrated a rufous morph; having an overall orange-red colour, barred back, spots on the head and a formed occipital.

[4] Their call starts mellow and becomes shriller with excitement[13] while turning their head in all directions, creating a ventriloquial effect and making it hard to locate the bird.

The collared owlet has a very large range occurring in the Himalayas of northern Pakistan all the way to eastern China and Taiwan.

[4][3] This bird can be found in the following countries: Bhutan, Brunei Darussalam, Cambodia, China, India, Laos, Malaysia, Myanmar, Nepal, Pakistan, Taiwan, Thailand and Viet Nam.

[6] Although not much is known about the reproductive methods of the collared owlet, it is believed that the mating couple only remains together during the period of breeding season, which is from March to April.

[4] Although the collared owlet is at least concern on the IUCN Red list,[1] its main threat is habitat loss.

[17] The authors concluded that anthropogenic pressures such as deforestation can affect even small species such as the collared owlet.