The type form (B. l. lineola) can be found from South Mexico to West Panama. In contrast, B. l. tigrinus can be met more southern in West Colombia, in parts of the Andes in North-West Venezuela, North-West Ecuador and Central Peru. Some birds have been sighted in Bolivia as well.

There, the Lineolated Parakeet likes to spend its time in the trees of dense woodland, where it is perfectly camouflaged on account of its colouring. But it also can be found in savannas with only a few trees, thin forests and cloud forests of the sub-tropic zone of Central America. Nevertheless, in the summer months the birds haunt mountain forests of altitudes up to 2300 m. They prefer altitudes above 1500 m. In winter they migrate into lower regions (more or less 600 m).
The nomadic living Lineolated Parakeets mostly appear in little flocks with less than 20 birds or in pairs. Groups of more than 100 animals can only be oberserved outside the breeding season. Hundreds of those little parakeets are looking for sleeping trees then. They fly with loud and shrill calls, crossing free areas fast and at ample altitude; in contrast, they are hardly attracting attention in big trees, only a clear chirping indicates their presence. According to Kolar/Spitzer Lineolated Parakeets are birds of the forest which are visiting maize fields during the time of ripening, too. In the wild you can hardly find these parakeets on the floor, in contrast to the experiences of aviary keeping. Compared to this, Bielfeld (1992) and Vriends (1999) say that Lineolated Parakeets are often spending time on the floor searching for seeds and insects.
Robiller (1986) points out that the population of Lineolated Parakeets is essentially stable in their natural habitat. Thus, deforestations hardly lead to stock decrease. In contrast Low (1998) states that the Lineolated Parakeet becomes rare in Mexico due to an increase of the destruction of their restricted habitats.

There is no sufficient information about the breeding behaviour. It is only known, that Lineolated Parakeets, as well as most parrots, are cavity-nesting birds who raise their chicks in dead trees. According to Juniper and Parr (1998) the breeding periods of Lineolated Parakeets are as follows: in Costa Rica in dry seasons, in Panama probably in December and in Colombia in July/August. The diet of the Lineolated Parakeets mainly contains fruits and seeds of trees. Lantermann (2002) mentions food plants of the genus Myrtis, Heliocarpus, Miconia and Cecropia as well as bamboo seeds (Chusquea-bamboo) and maize. Arndt (1986) describes Lineolated Parakeets eating seeds of the burio-tree as well as the small black berries of a dendroid Miconia and other fruits. Nevertheless, Lineolated Parakeets probably take in insects as well as their larvae as animal food component. Overall, due to their nomadic habits the diet of the Lineolated Parakeets varies strongly.