The use of artificial nest boxes to bolster populations of endangered cavity-nesting birds has increased significantly, but spatial variation of nest-box occupancy rates and breeding success within a nest-box population has been little studied. In a case study with 798 Little Owl (Athene noctua) nest boxes established in central Germany, we analyzed the dependence of occupancy rate and breeding success on the characteristics of the surrounding habitat. The analysis focused on two aspects of general concern for nest-box management: (1) whether nest boxes were occupied for breeding or were left unoccupied, and (2) whether Little Owls had different reproductive rates, depending on the location of nest boxes. A high resolution (1 × 1 m) land-use map was used to analyze species-habitat relationships, and Generalized Linear Mixed Models were used to predict suitable nest-box locations. During the period from 2004 to 2006, 544 (68%) of the nest boxes were never occupied, 144 (18%) housed birds with low breeding success and only 108 (14%) housed pairs that produced more than 2.35 nestlings annually, a reproductive rate thought necessary for population stability. Nest boxes were more likely to be occupied if they were located near orchards, at lower altitude, and in areas of higher densities of fields and less forest. Higher breeding success was associated with fallow fields and field margins, and with greater distance to roads and forests. Our results suggested that the efficiency of this nest-box program could be substantially increased if unoccupied nest boxes were relocated to sites where occupancy is more likely, and if unproductive nest boxes were relocated to locations that would enhance breeding success.