The Pygmy Three-toed Sloth had become listed due to its habitat destruction on a small island in Panama, Isla Escudo de Veraguas and the local population illegally hunting this species. As time has progressed more people have intruded into these sloths livelihood without consequences to there actions. This led to the animal being listed critically endangered back in 2006

This specie only lives on the small island Isla Escudo de Veraguas in the islands of Bocas del Toro, Panama.

The Pygmy three toed sloths current shows 79 have been spotted in there relatively small habitat. However there are no true estimates on the size of the population.

The Population trend is decreasing currently for this species. While the island that these sloths live on is suppose to be uninhabited fisherman, farmers, lobster divers and other locals come and hunt these sloths illegally. Also mangrove trees have been cut down in this habitat, which is where the Sloths prefer to live. An increase in tourism to this area could lead to hurting the ecosystems these sloths live in.

These sloths habitat can be found in both mangrove patches that surround the island and in the interior parts of the island. Their main food is the leaves of the red mangrove trees.

Since Pygmy three toed sloths are a recently recognized species back in 2001 little is known of there ecological impact. They may affect vegetation in there environment while browsing. These sloths however do act as prey for larger predators in their environment.

These sloths are suppose to be protected but there is no true enforcement to stop people from hunting the species or degrading there habitats. There is a more extensive conservation plan for the island to be put in place. This plan would bring together the local community, wildlife authorities in Panama, and the national and international scientific community to protect the island and the sloths.