The breeding of palm cockatoos Probosciger aterrimus was studied for 3 years from July 1999 to February 2002 in and around Iron Range National Park, Cape York Peninsula, Australia. Palm cockatoos were weakly seasonal breeders, with the peak of egg-laying occurring in September; 41 breeding attempts were monitored at 28 nesting hollows. Nearly all (27/28) nests were in tropical savanna woodland and an average distance of 320 m to rainforest. Males defended about four nest sites, only a subset of which were used for breeding. The typical active nest tree was in a near-vertical hollow with an opening that faced skywards; 62.1% of active nests were in living trees and the most common species of nest tree was Eucalyptus tetrodonta (48.3%). DNA fingerprinting revealed that some pairs reused the same nest hollow even when breeding attempts were separated by 1 or more years of no breeding activity, but that changes in hollow ownership also occurred. Nest usurpation, male territorial displays at the nest and evidence of interference competition by conspecifics suggest strong competition for nest sites, which is probably driven by variation in hollow quality and high investment in the nesting platform. Of active nests, 81% failed to produce a fledgling, thereby ranking the breeding success of palm cockatoos among the lowest reported for any species of parrot. They also invariably laid a single egg and seemed to breed infrequently, and thus they use an extremely slow life-history strategy. We suggest that this slow life history makes palm cockatoos on Cape York Peninsula sensitive to environmental perturbations, with fire being the most probable threatening process.