Among birds, breeding numbers are mainly limited by two resources of major importance: food supply and nest-site availability. Here, we investigated how differences in land-use and nest-site availability affected the foraging behaviour, breeding success and population trends of the colonial cavity-dependent lesser kestrel Falco naumanni inhabiting two protected areas. Both areas were provided with artificial nests to increase nest-site availability. The first area is a pseudo-steppe characterized by traditional extensive cereal cultivation, whereas the second area is a previous agricultural zone now abandoned or replaced by forested areas. In both areas, lesser kestrels selected extensive agricultural habitats, such as fallows and cereal fields, and avoided scrubland and forests. In the second area, tracked birds from one colony travelled significantly farther distances (6.2 km ±1.7 vs. 1.8 km ±0.4 and 1.9 km ±0.6) and had significant larger foraging-ranges (144 km2 vs. 18.8 and 14.8 km2) when compared to the birds of two colonies in the extensive agricultural area. Longer foraging trips were reflected in lower chick feeding rates, lower fledging success and reduced chick fitness. Availability and occupation of artificial nests was high in both areas but population followed opposite trends, with a positive increment recorded exclusively in the first area with a large proportion of agricultural areas. Progressive habitat loss around the studied colony in the second area (suitable habitat decreased from 32% in 1990 to only 7% in 2002) is likely the main driver of the recorded population decline and suggests that the effectiveness of bird species conservation based on nest-site provisioning is highly constrained by habitat quality in the surrounding areas. Therefore, the conservation of cavity-dependent species may be enhanced firstly by finding the best areas of remaining habitat and secondly by increasing the carrying capacity of high-quality habitat areas through safe nest-site provisioning.