Lowland areas of north-eastern Bolivia (eastern Pando, eastern La Paz, eastern Cochabamba, Beni, Santa Cruz), adjacent Brazil (eastern Rondônia, south-western Mato Grosso) and extreme north-eastern Paraguay.
 
Population
Estimated population is unknown (2010).
Fawn-breasted Wren (Cantorchilus guarayanus) [XC854900]
by Richard E. Webster from Aquidauana, Mato Grosso do Sul, Brazil (call, song)
Fawn-breasted Wren (Cantorchilus guarayanus) [XC461415]
by JAYRSON ARAUJO DE OLIVEIRA from Miranda, Mato Grosso do Sul, Brazil (song)
Subspecies
No subspecies.
Forms a superspecies with Buff-breasted Wren (Cantorchilus leucotis), Superciliated Wren (Cantorchilus superciliaris) and Long-billed Wren (Cantorchilus longirostris) and sometimes regarded as conspecific with Buff-breasted Wren (Cantorchilus leucotis), although vocalizations quite distinct.