Nankeen night herons have a broad distribution and are found in Australia, New Zealand, the Philippines, Papua New Guinea, the Solomon Islands, Java, New Caledonia, Palau, and the Caroline Islands, Federated States of Micronesia. They are native to Australia and are widespread in most states of the country except for the west, in which it is rare or absent. Nankeen night herons have six subspecies, which includes the Bonin nankeen night heron (Nycticorax caledonicus crassirostris).
The nankeen night heron is resident in a wide range of habitats, which includes grasslands, meadows, forests, lagoons, beaches, reefs, marshes, shores, wetlands, and swamps. It is most commonly found near rivers and streams. The species prefer habitats with emergent vegetation when near permanent water. The nankeen night heron is mainly nocturnal, and thus roosts during the daytime in dense cover of trees, bushes, and reeds. In more exposed situations, they are also known to roost in dead trees. In urban areas, the nankeen night heron favours nesting and roosting in trees such as cypresses and pines. They also reside in urban wetlands, dry fields, gardens, ponds, airports, and parks.