The crested caracara is quite adaptable and hardy, for a species found predominantly in the neotropics; it can be found in a range of environments and ecosystems, including semi-arid and desert climates, maritime or coastal areas, subtropical and tropical forests, temperate regions, plains, swamps, and even in urban areas.

Documented, albeit rare, sightings have occurred as far north as Minnesota and the Canadian provinces of Ontario and Prince Edward Island.

[4] The southern extent of the crested caracara's distribution can reach as far as Tierra del Fuego and Magallanes Region, Chile.

[14][15] Individuals from the colder southern part of its range average larger than those from tropical regions (as predicted by Bergmann's rule) and are the largest type of caracara.

)[16] Juveniles resemble adults, but are paler, with streaking on the chest, neck, and back, grey legs, and whitish, later pinkish-purple, facial skin and cere.

[18] The opportunistic nature of this species means that the crested caracara seeks out the phenomena associated with its food, e.g. wildfires and circling vultures.

It avoids the Andean highlands and dense humid forests, such as the Amazon rainforest, where it is largely restricted to relatively open sections along major rivers.

Florida is home to a relict population of northern caracaras that dates to the last glacial period, which ended around 12,500 BP.

[28] Their historical range on the modern-day Florida peninsula included Okeechobee, Osceola, Highlands, Glades, Polk, Indian River, St. Lucie, Hardee, DeSoto, Brevard, Collier, and Martin counties.

Mexican ornithologist Rafael Martín del Campo proposed that the northern caracara was possibly the sacred "eagle" depicted in several pre-Columbian Aztec codices, as well as the Florentine Codex.

[31] Balduin Möllhausen, the German artist accompanying the 1853 railroad survey (led by Lt. Amiel Weeks Whipple) from the Canadian River to California along the 35th parallel, recounted observing what he called the "Texan Eagle", which, in his account, he identified as Audubon's Polyborus vulgaris.