The volcano rabbit lives in groups of 2 to 5 animals in burrows (underground nests) and runways among grass tussocks.

[4][9] Its speediness and hind limb development relative to its body size correlates to a need for evasive actions.

[9] Volcano rabbits are more abundant near tall, dense herbs and thick vegetation, and are adversely affected by anthropogenic environmental disturbances like logging and burning.

[14] The volcano rabbit's range encompasses a maximum of 280 km2 of grasslands in elevated areas in the Trans-Mexican Neovolcanic Belt.

[9] Research conducted by Hoth et al., in relation to the distribution of the Volcano Rabbit in 1987 found no records of this species in the Nevado de Toluca, including the site where Tikul Álvarez (IPN) collected a specimen in 1975 (Nevado de Toluca, 4 km S, 2 km W Raíces, 3350 masl).

[4] Though there was an unconfirmed sighting in the region in August 2003, no permanent volcano rabbit colony has been documented in Nevado de Toluca and it was declared "extinct" within this portion of its range in 2018;[15] populations exist elsewhere within the Trans-Mexican Volcanic Belt and in captivity.

[4][5][16] The International Union for the Conservation of Nature no longer mentions the Nevado de Toluca as a current or potential site for the distribution of this species.

[17] The IUCN/SSC Lagomorph Specialist Group has created an action plan for this rabbit that focuses upon the need to manage the burning and overgrazing of its Zacatón habitats and to enforce laws prohibiting its hunting, capture, and sale.

[9] Studies about the volcano rabbit's geographical range, role in its habitat, population dynamics, and evolutionary history have been recommended.

[9] The volcano rabbit feeds primarily on grasses such as Festuca amplissima, Muhlenbergia macroura, Stipa ichu, and Eryngium rosei.

[18] Volcano rabbits also consume leaves, foliage, and flowers indiscriminately under poor conditions, as habitat loss has eliminated much of their food sources.

[18] Threats to R. diazi include logging, harvesting of grasses, livestock grazing, habitat destruction, urban expansion, highway construction and frequent forest fires.

Furthermore, efforts must be put toward habitat management, specifically the control of forest fires and livestock overgrazing of grasses.

[citation needed] Numerous studies conducted during the 1980s and 1990s agreed that the habitat of the volcano rabbit was shrinking due to a combination of natural and anthropogenic causes.

[20] There is evidence that its range has shrunk significantly during the last 18,000 years due to a 5–6 °C (41–43 °F) increase in the prevailing temperature, and its distribution is now divided into 16 patches.

[20] The fragmentation of the volcano rabbit's distribution has resulted from a long-term warming trend that has driven it to progressively higher altitudes and the relatively recent construction of highways that dissect its habitat.

[9] Volcano rabbits have been bred in captivity,[5] but there is evidence that the species loses a significant amount of genetic diversity when it reproduces in such conditions.