Distribution in the Americas
White-banded Tanager occurs in central South America in the countries of Suriname, Brazil, Bolivia, and Paraguay (Bond and Meyer de Schauensee 1942, Pinto 1944, Sick 1993, Guyra 2004, Ottema et al. 2009). The core of its distribution is in central Brazil and adjacent regions, where it occurs from southern Maranhão and Piauí south through Goiás, western Bahia and Minas Gerais to São Paulo, Brazil and Amambay, Paraguay; and westward through southern Mato Grosso, Brazil, to Santa Cruz, Bolivia (Isler and Isler 1987). Disjunct populations are found in savannas far to the north in the Brazilian state of Amapá (Cavalcanti 1989, Silva et al. 1997), and in southern Suriname (Ottema et al. 2009).
Generally, White-banded Tanager is found in the lowlands, up to 1100 m in Brazil, and up to 550 m in Bolivia (Isler and Isler 1987, Parker et al. 1996). The center of elevational abundance is in the lower tropical zone (Parker et al. 1996). This species occurs within the Cerrado subregion of the Central South America zoogeographic region (Parker et al. 1996).
Distribution outside the Americas
White-banded Tanager is endemic to South America.
Parker et al. (1996) lists cerrado, a wooded savanna, as the primary habitat of White-banded Tanager. It is strongly dependent on a shrub stratum, primarily in dense cerrado scrubs where crowns of trees shade at least 50% of the ground (Isler and Isler 1987, Tubelis and Cavalcanti 2000). They are most abundant in partially cleared cerrado, then in shrubby pastures; they intermittently occur in grasslands containing groves of semi-deciduous trees reaching 7-15 m in height, and are least common in grassland or disturbed areas with scattered trees (Isler and Isler 1987, Tubelis and Cavalcanti 2000). In northern Brazil they have been reported from savanna habitat (Silva et al. 1997). In eastern Bolivia, White-banded Tanager is found in open woodland with thick grass and low bushes (Isler and Isler 1987).
Much of the White-banded Tanager's habitat in eastern and southern Brazil has been converted to soybean farmlands, and populations have declined in these areas (Hilty 2011). So far extirpation has been local, without major changes to the known distribution of this species.