Band-tailed Nighthawk is widespread in northern South America east of the Andes, although it is local or patchily distributed in some regions, and there apparently are gaps in its distribution. It occurs from northern Venezuela and eastern Colombia east to French Guiana and eastern Brazil in Amapá and eastern Pará, south to northern Bolivia and northeastern Paraguay (Pinto 1938, Meyer de Schauensee 1949, Phelps and Phelps 1958, Snyder 1966, Hilty and Brown 1986, Tostain et al. 1992, Hilty 2003, Guyra Paraguay 2004). Although Band-tailed Nighthawk is known both from Guyana and French Guiana, there are no definite records from Suriname (Ottema et al. 2009). There are only a few records from eastern Ecuador, where it was not detected at all until as recently as 1990 (Ridgely and Greenfield 2001a). It is somewhat more widespread in northern Peru, along the Amazon, but here too was not reported until the 1980s (Begazo and Valqui 1998, Alvarez Alonso and Whitney 2003). Band-tailed Nighthawk first was collected in Bolivia in 1964, but these records were not published until there was additional records from Bolivia in the 1980s and 1990s (Bates et al. 1989, Parker et al. 1991, Davis et al. 1994).
Band-tailed Nighthawk is confined to the lowlands. It only is reported below 300 m in Colombia (Hilty and Brown 1986), below 200 m in Venezuela (Hilty 2003), and below 300 m in Bolivia (Hennessey et al. 2003).