The Yellow-eyed penguin usually nests in forest or scrub. It feeds mainly on blue cod, red cod, opal fish, sprat and squid. They spend most of their day at sea, feeding in the warm New Zealand waters. Amazing underwater swimmers, they can dive to depths of 400 feet and are adapted to holding their breath for up to four minutes. Yellow-eyed penguins may travel up to 20 miles from shore to feeding grounds at the edge of the Continental Shelf.

These penguins are forest nesting birds, preferring to nest in a secluded site backed up to a bank, tree or log. Coastal deforestation, however, has forced these penguins to seek refuge among tall shore grasses where adults, eggs and chicks frequently become prey to introduced dogs, cats, stoats, ferrets and rats.

During their lengthy breeding season, which runs from mid-August to mid-March, the penguins come ashore in the evening and waddle clumsily up the beach to their inland nest sites. In September to mid-October, females lay two eggs in nests of sticks and coarse grass which provide shelter from the hot sun and protection from storms.