It is sparsely distributed in hills, lower montane forest and lowland forest near foothills (Pratt and Beehler 2015) at altitudes from the lowlands to 1,500 m (Beehler and Pratt 2016). 

Aegotheles wallacii is known only from New Guinea (Papua, formerly Irian Jaya, Indonesia and Papua New Guinea). It has been recorded from the Aru islands and Vogelkop in the far west across to Karimui in central Papua New Guinea. It is known from few specimens and few recent observations; the paucity of records largely results from the extremely unobtrusive nature of the genus, and its call was poorly known (Coates 1985, Beehler and Pratt 2016). Several sound recordings of the species have now been made from the southern and northern lowlands (I. Woxvold pers. comm. per G. Dutson in litt. 2016).