Listed as Critically Endangered because its extent of occurrence is less than 100 km², its area of occupancy is less than 10 km², the population is severely fragmented, and there is continuing decline in the extent and quality of its habitat and in the number of mature individuals.

The Mountain Pygmy Possum is endemic to south-eastern Australia where it occurs as three isolated, genetically distinct populations: 1) between Mt. Bogong and Mt. Higginbotham, Victoria 2) at Mt. Buller, Victoria and 3) in the Kosciuszko region of New South Wales (Osborne et al. 2000). Its range is much smaller than the mapped distribution, and its area of occupancy is estimated to be less than 6 or 7 km² (Heinze et al. 2004; Broome 2008). This species ranges in elevation from 1,300 to 2,228 m asl (Broome 2008).

Common where they occur, but declining. The total population is estimated to number approximately 1,700 adult females and 550 adult males (Broome 2008).

This is the only Australian mammal species confined to alpine environments (Broome 2008). They occur in periglacial boulder fields (basalt, granite, granodiorites) overlain with mountain plum-pine Podocarpus lawrenceii heathland and adjacent alpine communities. The basalt boulderfields have the greatest population density. Mountain Pygmy Possums are nocturnal and terrestrial, but they are also adept climbers. It has a spring-summer diet composed predominantly of Bogong moths Agrotis infusa and other invertebrates with seeds and fruits important in late summer and autumn (Mansergh and Broome 1994). Females normally have one litter of 4 young following snowmelt in spring. All individuals accumulate subcutaneous fat during late summer and autumn and spend the winter in hibernation (about 7 months for adults and 5 months for juveniles; Geiser and Broome (1991)). Snow cover provides important insulation and protection to hibernating animals.

The extremely restricted habitat has been fragmented or destroyed by road construction, dam/aqueduct construction, and development of infrastructure for the downhill skiing industry. Approximately 50% of the habitat supporting the Mt. Bogong-Mt. Higginbotham population and 20% of the Kosciuszko habitat was burned in bushfires in January 2003, killing Podocarpus heathland aged from 50-400 years (L. Broome pers. comm.). The population at Mt. Buller suffers from fragmentation and subpopulations here and around ski resorts in the Kosciuszko area have declined severely since 2000 due to: habitat destruction, predation by feral cats, and possibly low snow cover. Predation by the introduced Red Fox is also a threat and the habitat is subject to weed invasion (e.g., willow Salix species). Bogong moths are migratory and have been found to carry arsenic from their breeding grounds in the Murray-Darling Basin to the mountains where it accumulates in food chains. Arsenic has been found in the scats of B. parvus and other small mammals, but the implications of this are as yet unknown (Green et al. 2001).

Marginalisation and loss of habitat and the severity of predation are predicted to increase with global warming. A recent trend of second litters following early snow melt has been observed at Mt. Buller (D. Heinze pers. comm.). Neither second litters nor their mothers are known to survive the winter because they are unable to accumulate the fat reserves necessary for successful hibernation through winter.

The entire extent of the species' range is in protected areas, though important parts (and all of the Mt. Buller population) are in ski-resort lease areas. Government-endorsed management plans exists in Victoria (Mansergh et al. 1989) and New South Wales (NSW 2002), and a national recovery plan is being prepared. The recovery objectives for this species (Maxwell et al. 1996; NSW 2002), include: conserve all remaining habitat and maintain it in a condition to support existing population levels; restore or re-create habitat in areas of disturbance; define habitat and population levels in Buller-Stirling area (Victoria) and reassess total population size and distribution of habitat in New South Wales; control feral predators and exotic species; monitor populations and habitat; define source and sink populations, understand genetic interrelationships and produce a metapopulation dynamics model; review threatening processes and predict the probability of long-term persistence in the wild; determine the feasibility of a viable captive breeding program; promote community awareness.

Recovery actions completed or underway include: distribution and abundance is well defined, general ecology and population dynamics have been studied at five sites over the last 20 years and additional sites over the last 10 years. Monitoring of populations, diet, food supply (Bogong moths and seeds) and habitat in ski resorts and control areas and consequent on-ground protection and planning is ongoing; protocols that provide protection to populations have been developed within some ski resorts, legislative and operational protection of all habitat needs to be finalised. Habitat restoration is occurring in fragmented, burnt, and disturbed areas in ski resorts. Feral cat, fox, rabbit, and weed control has been initiated in some areas; genetic studies are nearing completion; establishment of a captive colony of the Mt. Buller population is under consideration.

Studies required include: determine effects of the ski industry (notably use of snow-grooming equipment over habitat) and loss of snow cover on hibernation and over-winter survival; investigate Bogong moth population dynamics and pesticide residues, the possibility of competition or predation by co-occuring small mammal species, social dynamics, reproductive success, and captive husbandry techniques; continue research aimed at producing reliable metapopulation dynamics and viability models.