This armadillo, which can roll into a ball when threatened, is found in areas of dry vegetation within the Chaco (Bolkovic et al. 1995). Although capable of digging its own burrows (Attias et al. 2015), it often uses abandoned burrows of other species or hides in dense vegetation. It has a slow reproductive rate; the females give birth to a single young per litter and per year. Its generation length has been estimated at four years; this estimate is based on an extrapolation from other armadillo species.

Tolypeutes matacus is found from eastern Bolivia and southwestern Brazil, south through the Gran Chaco of Paraguay, to Argentina, with San Luis province being its southernmost limit (Feijó et al. 2015, Ferreiro et al. 2022). The species was once present in southern Buenos Aires Province (Yepes 1928) but recent surveys suggest that it is now extinct in this area (Abba and Vizcaíno 2008, 2011; Abba et al. 2012). The reason for its disappearance from Buenos Aires is unknown, but may be related to climate. It ranges from sea level up to 800 m asl (Argentina).

Tolypeutes matacus has been recorded from a number of protected areas but with no more than 12% of its suitable area under protection (Ferreiro 2022; A. Ferreiro pers. comm. 2024). There is a Population Management Plan in place for the captive populations in North American and European zoos.