It is found in savannah and open woodland and is one of two extant species in its genus that breed in termite mounds.

Its species name is the Latin word dissimilis "different" and either refers to its sexual dimorphism or its different appearance from its closest relative.

The hooded parrot is evaluated as Least Concern on IUCN Red List of Threatened Species.

The female lays four or five white, slightly shiny eggs that are 21 long by 19 mm wide.

[8] The hooded parrot has a close ecological relationship with the moth species Trisyntopa neossophila.

The moth larvae live in small tunnels at the base of the cavity and emerge to eat the dark material of parrot feces, leaving the white uric acid deposits.

[7] The termite mounds are vulnerable to damage by cattle in cattle-breeding areas, which threatens nesting sites.