Rufous-banded Honeyeaters have a quite restricted distribution in Australia - close to the coast in the Top End and Cape York Peninsula where they inhabit humid places like mangroves, monsoon rainforest, swampy forests and also gardens. They also occur in southern New Guinea and the Aru Islands.

Rufous-banded Honeyeaters once adult are fairly sedentary and live as pairs in permanent territories - young ones wander further afield in search of food and no doubt are responsible for the occasional influxes that are reported in gardens etc.