Cockatiels are found throughout Australia except in the wettest coastal forests or the driest central deserts. They are nomadic, moving from one area to the next based on the seasonal availability of food and water. Their primary food is grass seeds, but they will also sometimes eat leaves, berries, and insects. Foraging generally occurs on the ground. Cockatiels are highly social and intelligent, often seen in pairs or loose flocks. In a large flock, some birds look for predators like falcons while other birds are feeding.

They show sexual dimorphism, which is uncommon among parrots. Adult males have a bright yellow face and crest with more vivid orange cheek patches, while females have a grey or muted face, lighter cheek patches, and horizontal barring on the underside of the tail and flight feathers. Juveniles resemble females until they moult into adult plumage, with young males gradually developing the brighter yellow facial colouring.

Cockatiels are monogamous and form strong lifelong pair bonds. Breeding typically occurs after rain, and pairs nest in tree hollows. The female lays four to seven white eggs, and both parents take turns incubating them for about 18–21 days. Chicks leave the nest approximately five weeks after hatching but remain dependent on their parents for several weeks while they learn to forage.

The species is listed as Least Concern on the IUCN Red List due to its large population and wide distribution. Cockatiels have adapted well to human-modified landscapes and can often be seen near farmlands or watering points. However, they are still vulnerable to habitat loss, predation by invasive species, and, in the past, trapping for the pet trade.

Cockatiels can live up to 35 years.