The distribution of little penguin nest sites on Montague Island, New South Wales, was examined in relation to vegetation type, distance to landing sites and local footpaths. Nest site density was negatively correlated with distance to landing sites and positively correlated with distance to footpaths. The latter may be related to disturbance. Comparisons with the transect data of previous years showed a significant shift in nest distribution away from areas dominated by dense kikuyu grass. In October 2000, the little penguin population on Montague Island was estimated at 5000 breeding pairs. However, repeat surveys in November and December showed that single counts underestimate the actual size of the breeding population. This study has demonstrated the value of line transects to examine the relationship between little penguins and their breeding habitat. Transect surveys on Montague Island should continue in future years to monitor the effects of ongoing vegetation changes on nest distribution and population size.