It is found in Brazil, Suriname, Bolivia, Ecuador, Colombia, areas of northeast Peru, Venezuela, French Guiana and Guyana.

The red-fan parrot was formally described in 1758 by the Swedish naturalist Carl Linnaeus in the tenth edition of his Systema Naturae.

[2] Linnaeus based his description on the "hawk-headed parrot" that had been described and illustrated in 1751 by the English naturalist George Edwards in the fourth volume of his A Natural History of Uncommon Birds.

[4][5] The red-fan parrot is now the only species placed in the genus Deroptyus that was introduced in 1832 by the German naturalist Johann Wagler.

[8] Two subspecies are recognised:[7] The red-fan parrot possesses elongated neck feathers that can be raised to form an elaborate fan, which greatly increases the bird's apparent size, and is possibly used when threatened.