The Aztec Parakeet is distributed on the Caribbean slope of Central America from north-eastern Mexico to western Panama. See the distribution map at Birdlife International. It is found in forest and forest edges as well as open areas with scattered trees.

It has been lumped with Jamaican Parakeet E. nana in the past and was known as Olive-throated Parakeet Aratinga nana. Recently (2014) the HBW and Birdlife Checklist split the species on the basis that the Aztec Parakeet is a lighter brown on the underparts with lighter and less extensive blue on the flight feathers and is smaller in size.