Terrestrial habitat is important for breeding in most pinnipeds. On land, most species remain near the shore, but New Zealand (NZ) sea lions, Phocarctos hookeri, often rest inland up to 1.5 km from the sea. Only three breeding areas of NZ sea lions exist today after the species was extirpated from its historical range (NZ mainland). The study was conducted at the Sandy Bay breeding colony, Auckland Islands, between December 2002 and March 2003. We used daily Global Positioning System locations of breeding females with pups and mapping in a Geographic Information System to determine terrestrial habitat use and preferences. Slopes less than 20° were preferred throughout the study. Females chose nursing sites with a seasonal change, preferentially based on the distance from the sea and habitat type. Comparisons with the other breeding colonies of NZ sea lions are presented and data are discussed in the context of the recolonization of the NZ mainland. Overall, the most suitable terrestrial habitat configuration for a breeding aggregation of NZ sea lions appears to be a sandy beach, with a wide area above high tide and moderate intertidal zone (for breeding), backed with vegetated sand dunes and forest on primarily flat terrain (for later dispersion).