Scarlet Macaw feeding at the Salt Lick in the Yasuni

Scarlet Macaws originate in the humid lowland subtropical rain forests, open woodlands, river edges, and savannas of Central and South America. The habitat of the Central American Scarlet Macaw runs through the extreme eastern and southern regions of Mexico and Panama, but also through Guatemala and Belize, while the South American population has an extensive range that covers the Amazon basin; extending to Peru east of the Andes, to Bolivia, and Paraguay.[4] While generally infrequent on the mainland, great colonies of Scarlet Macaws can still be found on the islands of Coiba.

Before the Scarlet Macaw's decline in population, its distribution included much of Costa Rica. However, by the 1960s Scarlet Macaws had been decreasing in numbers due to a combination of factors, particularly hunting, poaching, and the destruction of habitat through deforestation. Further, the spraying of pesticides by companies cultivating and selling bananas for export played a significant role in decreasing Scarlet Macaw populations.

The combined factors stressed the population of Scarlet Macaws in Costa Rica, where they had previously occupied approximately 42,500 km² of the country's total national territory of 51,100 km², leaving viable populations in the early 1990s isolated to only two regions on the Pacific Coast of Costa Rica; the Carara Biological Reserve and Peninsula de Osa. By 1993 surveys had shown Scarlet macaws occupied only 20% (9,100 km²) of their historic range in Costa Rica.

The habitat of Scarlet Macaws is considered to be the greatest latitudinal range for any bird in the genus Ara,[5] as the estimated maximum territorial range covers 6,700,000 km². Nevertheless, the Scarlet macaw's habitat is fragmented, and colonies of the bird are mostly confined to tiny populations scattered throughout Central and South America. However, as they still occur in large numbers in some parts of their territory, where they are described as "common," the World Conservation Union evaluated the species in 2004 as "Least Concern".

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