Species distributions are influenced by variation in environmental conditions across many scales. Knowledge of fine-scale habitat requirements is important for predicting species occurrence and identifying suitable habitat for target species. Here we investigate the perplexing distribution of a riparian habitat specialist, the western subspecies of the purple-crowned fairy-wren (Malurus coronatus coronatus), in relation to fine-scale habitat associations and patterns of riparian degradation. Surveys of vegetation attributes, river structure and disturbance indicators that are likely to be causal determinants of the species occurrence were undertaken at 635 sites across 14 catchments. Generalized Linear Mixed Modelling demonstrated that the probability of purple-crowned fairy-wren occurrence increased with Pandanus aquaticus crown cover, shrub density and height of emergent trees, while riparian structure and signs of cattle were indirect predictors of occurrence. As our study area predominantly contained Pandanus type habitat, we failed to identify river grass as an important component of habitat. Predictions from a cross-validated model of purple-crowned fairy-wren occurrence suggested distribution is constrained by three factors: (i) low quality of local habitat within catchments where the species occurs; (ii) broad-scale reduction in habitat quality that has resulted in extinction of the species from parts of its range; and (iii) unmeasured variables that limit the exploitation of suitable habitat. The reliance of the species on dense shrubby understorey suggests conservation efforts should aim to maintain the complexity of understorey structure by managing fire and grazing intensity. Efforts to halt the continuing decline of riparian condition and maintain connectivity between areas of quality habitat will help to ensure persistence of riparian habitat specialists in northern Australia.