In conservation management, outlining critical habitat is an important factor to consider when making recommendations on specific actions. Our study adopts a multi-level approach to determine critical habitat characteristics for boreal felt lichen (Erioderma pedicellatum (Hue.) P.M.Jørg.). The boreal felt lichen in the Avalon Forest Ecoregion of Newfoundland nearly exclusively inhabits balsam fir in old-growth forest stands. However, other factors still need to be determined to better understand what constitutes “critical habitat” in this region, i.e., what are the characteristics of the best quality forest stand for boreal felt lichen? We tested multiple working hypotheses at three levels: 1) at the tree-level, we examined tree morphometrics to determine substrate quality within the lichen habitat; 2) at the plot-level we assessed habitat characteristics and variation in landscape characteristics that can be captured within the 5 m plot radius; 3) we also measured habitat variables beyond the 5 m plot radius, these variables included distance from gaps of various types, elevation and distance from deciduous trees. In our study site, we compared 25 plot pairs, where one plot contained at least one boreal felt lichen thallus and the other contained no thalli. Our findings suggest that characteristics at each level are important when determining critical boreal felt lichen habitat. The tree-level models indicate that boreal felt lichen is likely to occur on trees with a small diameter (5–12 cm). The plot-level models show that north facing slopes are an important habitat characteristic. The beyond-plot analysis suggests an association with distance to deciduous trees, however findings were not consistent with the dripzone hypothesis; perhaps proximity to deciduous trees indicates poor habitat quality. The findings of this study will help streamline future survey efforts and guide important criteria in protecting critical habitat.