The Critically Endangered black-faced lion tamarin Leontopithecus caissara has a restricted distribution consisting of small mainland and island populations each with distinct habitats in coastal south-eastern Brazil. The conservation action plan for the species recommends translocation to increase population size and promote genetic exchange among threatened isolated populations, measures that require an understanding of habitat and resource requirements. We investigated habitat selection by the black-faced lion tamarin, comparing habitats and examining frequency of use by two insular groups and two mainland groups. Using this understanding of habitat preferences we were able to refine current estimates of the carrying capacity (K) for this species. Habitats preferred by mainland groups were swamps and inundated areas and secondary forest. Submontane forest was avoided, as were hydromorphic lowland forest and urbanized areas. Island groups used mainly tall lowland forest and arboreal restinga (forest on sandy soil). The finding that L. caissara avoids montane forest sheds light on its restricted distribution to low elevation coastal plains. An estimate of K indicated c. 700 individuals, which could be increased to c. 1,500 with appropriate conservation management measures. Findings agree with the supposition that lion tamarins are typical of mature Atlantic forest, with little altitudinal variation but flexible in their use of successional stages. Future conservation management measures should account for differences in habitat use, selection and differences between island and mainland habitats.