It can only be found in 50 square kilometres (19 sq mi) of mesic and wet forests at 1,200–2,150 metres (3,940–7,050 ft) on the windward slopes of Haleakalā.

[4] Fossil evidence indicates that the bird could at one time be seen in dry forests at elevations as low as 200–300 metres (660–980 ft), as well as on the island of Molokaʻi.

It uses its large beak and powerful jaw muscles to remove bark and wood from small trees and shrubs such as ʻākala (Rubus hawaiensis), kanawao (Broussaisia arguta), and ʻōhiʻa lehua (Metrosideros polymorpha), eating the insects underneath.

Females build a cup-shaped nest out of Usnea lichens and pūkiawe (Styphelia tameiameiae) twigs, placing it 12 metres (39 ft) above the forest floor.

Much of the land in the parrotbill's historic range was changed for agricultural purposes, timber production and animal grazing.

Introduced pests, such as mosquitoes, rats, and feral ungulates directly and indirectly affect the parrotbill's survival.

It is also part of the Maui-Molokai Bird Recovery Plan in 1984, which led to fencing areas of East Maui and removing feral ungulates.

[10] However, more recent studies have found that the population in fact dramatically declined after 2001, as climate change has made more of the higher-elevation forests that the kiwikiu inhabits more hospitable to mosquitoes.

A translocation effort to a restored area on the leeward slopes of Haleakalā in 2019 failed after most birds succumbed to avian malaria, despite otherwise doing well in the habitat.

Due to this, there have been several conservation efforts planned by the Maui Forest Bird Working Group, including at least temporarily fostering a sizeable captive population on zoos in the mainland United States (previous ex-situ conservation efforts were limited to only Hawaii), including potentially the National Aviary in Pennsylvania, Smithsonian Conservation Biology Institute in Virginia and the Tracy Aviary in Utah, potentially introduce a wild population to the island of Hawaii as a backup, manage and restore more habitat in Maui for eventual release, develop predator control tools, and perform landscape-scale mosquito control in the bird's native habitat.