The oriental dollarbird is found from Australia to Japan and India. It breeds in northern and eastern Australia between the months of September and April and winters in New Guinea and nearby islands. The birds prefer open wooded areas with hollow-bearing trees to build nests in.
The oriental dollarbird is most commonly seen singly with a distinctive upright silhouette on a bare branch high in a tree, from which it hawks for insects, returning to the same perch after a few seconds.