Understanding what constitutes high quality habitat is crucial for the conservation of species, especially those threatened with extinction. Habitat quality frequently is inferred by comparing the attributes of sites where a species is present with those where it is absent. However, species presence may not always indicate high quality habitat. Demographic parameters are likely to provide a more biologically relevant measure of quality, including a species' ability to successfully reproduce. We examined factors believed to influence territory quality for the grey-crowned babbler (Pomatostomus temporalis), a cooperatively breeding woodland bird that has experienced major range contraction and population decline in south-eastern Australia. Across three broad regions, we identified active territories and determined the presence of fledglings and the size of family groups, as surrogates of territory quality. These measures were modelled in relation to habitat attributes within territories, the extent of surrounding wooded vegetation, isolation from neighbouring groups, and the size of the neighbourhood population. Fledgling presence was strongly positively associated with group size, indicating that helpers enhance breeding success. Surprisingly, no other territory or landscape-scale variables predicted territory quality, as inferred from either breeding success or group size. Relationships between group size and environmental variables may be obscured by longer-term dynamics in group size. Variation in biotic interactions, notably competition from the noisy miner (Manorina melanocephala), also may contribute. Conservation actions that enhance the number and size of family groups will contribute towards reversing declines of this species. Despite associated challenges, demographic studies have potential to identify mechanistic processes that underpin population performance; critical knowledge for effective conservation management.