The Southern Highlands is a biodiversity hotspot, with 1558 native plant species and 374 native animal species identified within the Shire. 

Of those species, 50 of the plant species and 53 of the fauna species have been classified as endangered or threatened.

The Wingecarribee Biodiversity Strategy modelled the potential habitat of threatened species.

The model showed that all the rare flora species in the Shire are associated with either Sandstone or swamp vegetation. With regards to fauna habitats, the model indicated that there is a potential for the occurrence of at least two threatened species to occur in every vegetation community. Dry Nattai Escarpment Forest was identified as having potential habitat for as many as 15 of the threatened fauna species found in the Shire.