It is found in lowland Amazonia of northern Bolivia, adjacent southeastern Peru, and western Brazil (Acre, south-central Amazonas, and Rondônia).

[3][4] It breeds in water-filled fruit capsules of the Brazil nut, a characteristic also alluded to in its specific name castaneicola derived from the Latin castanea (horse chestnut, Aesculus), the root of the vernacular name castaña for the Brazil nut, together with the Latin colō meaning "to inhabit".

The upper lip has a narrow pale supralabial line that expands into a subocular spot.

The iris is bicoloured: golden above, bronze below, and with a dark horizontal stripe and reticulate or radiating lines.

[2] Osteocephalus castaneicola occurs in both terra firme (unflooded) and floodplain rainforests at elevations of 81–400 m (266–1,312 ft) above sea level.