The Ruby-crowned Tanager is found in the Atlantic Forest zoogeographical region, in the Southern Atlantic Coast subregion, in the countries of Brazil, Paraguay, and Argentina (Isler and Isler 1987, Parker et al. 1996). In Brazil, they range from southern Mato Grosso (Pinto 1944), southern Minas Gerais, and on the south end of Espírito Santo towards the Rio Grande do Sul (Isler and Isler 1987). They have been found in the provinces of Misiones and northeastern Corrientes, Argentina (Short 1971, Isler and Isler 1987). Reports have noted them within the Department of Neembucú, Paraguay along with a single bird found on the extreme west side of the Paraguay River (Isler and Isler 1987). The species is usually found in lowlands with sometimes inhabiting mountain slopes up to 1200 m (Isler and Isler 1987). In the Atlantic forest in Brazil, Ruby-crowned Tanagers were found at an elevation range of 0-1610 m (Alves et al. 2009). Models of the species' distribution during the Last Glacial Maximum show a similar distribution 15,000 years ago, with some models predicting a modestly expanded range to the north and southwest (Cabanne et al. 2016).
Although not labeled as a migrant species on BirdLife International (2016), the species may be partially migratory because the species abundance can fluctuate during different seasons and in different habitats. For example, in Guanabara, Brazil population numbers tend to increase in August and September, concurrent with the ripening of oranges, and continues to increase through the winter breeding season (Sick 1993, Isler and Isler 1987). This species is among the most abundant land bird recorded from Queimada Grande Island, Saõ Paulo, which is 33 km from the mainland. This abundance is driven by large numbers in the dry season (April to August), with the species not recorded from the island during the rainy season (Montanhini 2010). In Argentina, this species was most abundant in second-growth forests during the austral winter, much less common in second-growth in the austral summer, whereas abundance was similar in mature forests across these seasons, being slightly more abundant during the austral summer (Barzan et al. 2015). In Estancia Itabó, Paraguay, this species is common in the austral winter, and not recorded in the austral summer (Lowen et al. 1995).