Most Australian governments, and many around the world, now require developers to compensate for habitat and other environmental loss. The most common mechanism |used for this is biodiversity offsetting. In Australia, under the Commonwealth Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) developments are required to avoid and mitigate impacts to Matters of National Environmental Significance, including species listed as threatened under the Act. If significant impacts cannot be avoided, a biodiversity offset is often required to compensate for the environmental impacts, so that ‘no net loss’ is achieved. Biodiversity offsets can also be required under state and territory environmental legislation. A commonly used offset technique in developments where hollow- bearing trees are removed is installing nest boxes to provide substitute nesting and denning sites for environmentally significant species. The effectiveness of nest boxes as a substitute has not previously been well assessed. This research has monitored and assessed the effectiveness of a nest box program implemented by the New South Wales (NSW) Roads and Traffic Authority, in an area where a large number of hollow bearing trees were removed to make way for widening of a major road. The findings are of relevance to any programs where nest boxes are proposed to mitigate for the impacts of hollow bearing tree loss.