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Tree-cavity nesting is common for a broad range of bird species throughout the world. However, the majority of information on the use of cavity nests is largely derived from the Northern Hemisphere with little data originating from tropical or southern temperate areas. We discuss 3 factors (predation, microclimate, and cavity abundance) that may have shaped the evolution of New Zealand’s tree-cavity nesting birds. New Zealand’s landbird fauna possesses the highest percentage (24%) of secondary tree-cavity nesters (7 orders and 12 families) of any region examined. Given the high occurrence of tree-cavity nesting in New Zealand’s avifauna there may be environmental pressures that select for this form of nesting. Historically, birds were likely the main nest predators of New Zealand’s cavity nesting birds and indications are that nest predation levels are not comparable to some continental habitats. This suggests that other factors such as microclimate or cavity abundance may have played a disproportionate or complementary role in influencing the high percentage of tree-cavity nesting in New Zealand. However, evidence is limited and any attempt to identify selection pressures on tree-cavity nesting must be balanced against phylogenetic concerns, as some birds were likely tree-cavity nesters before their arrival in New Zealand.