The Chestnut-headed Nunlet is endemic to central Amazonian Brazil, where it is known from a relatively small area west of the Rio Negro and north of the Amazon, in reasonably close proximity to the large city of Manaus. Despite this, the species went unrecorded for many years following its description in the 1920s. It seems to be exclusively reliant on the understory of seasonally flooded blackwater forests (known locally as igapós), and is apparently excluded from neighboring terra firme forests by the presence of the Rusty-breasted Nunlet (Nonnula rubecula). This nunlet prefers areas with a dense cover of vines or other tangled vegetation, where it perches very unobtrusively making few movements, and is thus easily overlooked, except by observers familiar with its voice. The Chestnut-headed Nunlet is characterised by its bright rufous head, neck, and underparts, contrasting with the darker and browner back, wings and tail. It makes short sallies to capture flying insects and other invertebrates, but almost nothing else is known about this species’ ecology.