Previously assumed to be unintelligent animals, many species of birds display high levels of cognition and may even possess conscious awareness. In particular, both corvids and parrots have been the focus of cognitive research including studies on problem-solving, social intelligence, and sentience. Despite their similar neural architecture and cognitive abilities, the laws regarding these two families of birds differ greatly. In the United States, it is illegal to keep corvids as pets. Parrots, however, are one of the most commonly kept pets in America, although their care in captivity remains largely unregulated. Captive parrots suffer from a number of medical and psychological issues and experience high rates of neglect and abandonment. At the same time, wild parrot populations are dwindling due both to habitat loss and capture for the pet trade. This review examines the novel findings on avian cognition and applies them to the potential ethical implications of keeping parrots in captivity. In addition, suggestions for future directions are presented, including the development of legislation to protect captive and wild parrots.