The Yellow-lored Tody-flycatcher is endemic to south-east Brazil where it is found from Espírito Santo to Santa Catarina.

There is a distribution map at xeno-canto.

It is found in shrubby vegetation at forest borders, clearings and in gardens.

Though similar to the Common Tody-flycatcher Todirostrum cinereum it has a conspicuous yellow stripe above the lores, a more orange eye, a more olive back and an olive-yellow tail rather than black with white tips.