A fundamental aim of conservation biology is to understand how species respond to threatening processes, with much research effort focused on identifying threats and quantifying spatial and temporal patterns of species decline. Here, we argue that threats often reduce the realized niche breadth of declining species because environmental, biotic, and evolutionary processes reduce or amplify threats, or because a species’ capacity to tolerate threats varies across niche space. Our ‘niche reduction hypothesis’ provides a new lens for understanding why species decline in some locations and not others. This perspective can improve management of declining species by identifying where to focus resources and which interventions are most likely to be effective in a given environment.