[4] Formerly classified as a Species of Least Concern by the IUCN,[5] recent research shows that its numbers have been decreasing rapidly throughout its range; the New Zealand subspecies has been on the brink of extinction for decades.

[5] The New Zealand fairy tern has numerous breeding areas, largely incorporating the upper-north region of the North Island.

[7] In 2023, less than 40 individuals and 9 breeding pairs of the New Zealand fairy tern remained, the subspecies becoming a high priority for conservation.

[11][10] Fairy terns breed during spring, with courtship beginning in September, and nesting occurring largely from November to February.

[2] Each year, fairy terns develop breeding plumage, where their bills, legs, and feet become brighter and darker, and the dark colouration on their heads extends from forehead to nape.

As observed in many avian species, courtship displays function to indicate mate quality in order to facilitate reproductive success.

[10] Another key element of courtship in Fairy Terns is the exchange of fish, which is initially essential before copulation can occur in breeding pairs.

Fairy terns nest in low lying sand, eggs and young camouflaging with surrounding shells, shingle or gravel.

[10] Fairy terns have been observed to nest in different location types, including seaside bays, estuary mouths, sheltered lagoons and saltwater lakes.

[14] Colonies will often abandon nest location once the breeding season ends, driven by changing availability of food, predators, and vegetation.

Another key aspect of nest site selection is an abundance of shell cover, which fairy terns will preferentially choose.

This preference seemingly functions to increase camouflage and avoid predator detection, given their colouration which likely evolved to matched the white, orange and black shelled areas in which they nest.

[10] Males supply their partner with food throughout the nesting and incubation periods, though this behaviour decreases over time until the eggs hatch, when provisioning increases once more to care for the offspring.

Male provisional feeding gives the female nutritional support, allowing her to invest more in nesting and attend the eggs.

[11][16][17] Chick mortality may occur due to several factors including predation by other avian species, tidal flooding, egg failure, adverse weather and parental desertion.

[17] Further research is required to reliably establish breeding success in the Australian and New Zealand subspecies, though it is thought to be very low given their high vulnerability to tidal flooding and predation.

[10][18] However, adult survival is considerably higher, where fairy terns are able to mate for multiple breeding seasons, giving hope to the continuation of their species.

[2] Chick feeding rates vary considerably between nests, and decrease with disturbance as parents engage more in defensive behaviour.

[2][18] In defence, to protect their offspring, fairy terns will display aggressive behaviours towards perceived potential predators (mammalian, avian, and human), as well as intruding conspecifics.

[20] Likewise, in New Zealand, non-native invasive mammalian species including rats, mustelids, hedgehogs and cats, predate on fairy terns.

[7][2] As with fairy terns, non-native mammalian predation is a common issue for vulnerable endemic birds in New Zealand, and is a key focus for conversation.

[7][2] The only defence against predation for fairy tern chicks is their cryptic colouration, which allows them to camouflage with seashells that surround their nests.

[2][19] This contributes to a high level of chick mortality that threatens the decreasing population of fairy terns, particularly for the endangered New Zealand and New Caledonian subspecies.