Polylepis racemosa is endemic to high altitudes in the Andes of Peru, Bolivia and Ecuador.

It is very typical of the flora of the western Andes in southern Peru where it grows at altitudes of up to 14,625 ft (4,500 m).

[4] The region is known as the "Suni" meaning high and consists of long, narrow, steep-sided valleys and intervening undulating flatter areas.

This region is cold in the winter but has a dry climate; the herbage consists of various grasses and herbaceous plants, the wild potatoes Solanum acaule and Solanum bukasovii, and the woody shrubs P. racemosa, Mutisia acuminata, Baccharis sp., and Cantua buxifolia, which is the national flower of Peru.

The Polyepsis forest plays an important role in the ecosystem of the region, acting as a sponge to retain moisture.