The Forty-spotted Pardalote (Pardalotus quadragintus) is an endangered songbird with specialized habitat requirements, including Eucalyptus viminalis trees for foraging and tree cavities for nesting. The species was originally distributed throughout eastern Tasmania, Australia, but habitat loss and fragmentation resulted in the contraction of its range to just 3 islands and several remnant mainland patches, primarily in the southeast of the state. The species' remaining habitat is exclusively second-growth forest, with reduced nest-cavity availability, and it competes for cavities with a common generalist, the Striated Pardalote (Pardalotus substriatus). This study documents the frequency of cavity takeover across the major populations of Forty-spotted Pardalotes on Maria Island, Bruny Island, and mainland Tasmania. Additionally, the intensity of interspecific aggression by pardalotes toward conspecific and heterospecific competitors at nest sites was assessed using a model presentation experiment. Striated Pardalotes usurped ~10% of Forty-spotted Pardalote nest sites across all study areas, and up to 17% of cavities within a single region (mainland Tasmania). Conversely, Forty-spotted Pardalotes never usurped Striated Pardalote nests. Most takeovers (79%) occurred during the nest-building stage, although Striated Pardalotes removed or crushed Forty-spotted Pardalote eggs in 21% of takeovers (4 nests). However, there was no change in nest defense aggression across nest stages. Striated Pardalotes displayed equal aggression toward conspecific and heterospecific models, whereas Forty-spotted Pardalotes were more aggressive toward conspecifics. These results show that Striated Pardalotes are the dominant competitor for nest cavities, and reduce the breeding success of Forty-spotted Pardalotes by usurping their nest sites. Nest boxes are a promising option for restoring the availability of nest sites for Forty-spotted Pardalotes, but given the competition from Striated Pardalotes for nest sites, nest-box placement should take advantage of species differences in nest-site selection to minimize conflict.