We assessed the conservation status of the Chilean Woodstar Eulidia yarrellii, a small hummingbird endemic to a few desert valleys of northern Chile and southern Peru. Although no population studies had been conducted, this rare species was presumed to have undergone a severe population decline during the past decades. Fieldwork in Chile produced a population estimate for September 2003 of 1,539 individuals (929–2,287; 90% CI), located in just two valleys: Azapa and Vitor. There was no evidence of stable populations elsewhere. Our observations tend to confirm the hypothesis of a past decline and evidence points to three main factors driving that trend: (1) Most natural habitat has disappeared and the species relies mostly on artificial resources for feeding and nesting. (2) The start of heavy use of pesticides in the Azapa valley in the 1960s in order to control the Mediterranean fruit fly and other crop pests coincides with the last reports describing the species as abundant. (3) The irruption in the last two decades of the Peruvian Sheartail Thaumastura cora has apparently exerted serious competition pressure on the species. These findings support the classification of the species as globally Endangered. We describe the main lines of action of the recently approved Recovery Plan for the Chilean Woodstar.