Interactions between birds and mistletoes have been described in many regions worldwide, with most research focusing exclusively on the role of birds as seed and pollen vectors for these hemiparasitic plants. Mistletoe is also widely used by birds as a nesting site, with a recent family-level compilation identifying species in 43 families worldwide nesting in mistletoes. We reviewed breeding and nesting accounts of Australian birds to explore the extent of mistletoe nesting at the species level within an entire avifauna. In total, 217 species of Australian arboreal nesting bird from 29 families are here reported nesting in mistletoes, representing 66% of Australian species that nest in the foliage of trees. A further 28 species are also known to nest in mistletoes incidentally. This increases the total number of avian families known to exhibit this behaviour worldwide to 60, across 16 orders. Although no species can be considered an obligate mistletoe nester, several families regularly nest in mistletoes with >90% of Australian species known to have nested in mistletoes, including Pomatostomidae, Artamidae, Corvidae and Ptilonorhynchidae. Determining preference for mistletoe nesting is a priority for understanding this behaviour and we present guidelines for evaluating whether a particular species preferentially uses mistletoe as a nest-site. We postulate that the evergreen, dense habit of mistletoes provide a strong structural substrate on which to build a nest, offering a higher level of concealment and a more moderate nest microclimate than otherwise similar arboreal nest-sites. These features may also have a role in reducing nest predation and enhancing survivorship of nestlings. Future studies should focus on the mechanisms underlying this pattern using field experiments to evaluate the influence of mistletoe on nest microclimate, rates of predation and nest success.