It is found in Brazil, Colombia, Ecuador, French Guiana, Guyana, Peru, Suriname and Venezuela.

The white-chested puffbird was formally described in 1788 by the German naturalist Johann Friedrich Gmelin in his revised and expanded edition of Carl Linnaeus's Systema Naturae.

[3] Gmelin based his description on the "white-breasted barbet" that had been described in 1782 by the English ornithologist John Latham from a specimen that had been collected in Cayenne, French Guiana.

[4] The white-chested puffbird is now one of seven species placed in the genus Malacoptila that was introduced by George Gray in 1841.

[7][8] The white-chested puffbird is generally considered to be monotypic, though a subspecies M. f. venezuelae was proposed in 1947.

The other is in the lower Amazon Basin from the Guianas east and south into Brazil's Amazonas and Pará states.

It is thought to nest in a burrow in the ground as does its close relative the white-whiskered puffbird (M. panamensis).