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Abstract Climate change and habitat degradation are major threats to wildlife worldwide. Although developing animals are particularly sensitive to their impacts, with fitness consequences for individuals that cascade to population persistence, their combined effect and potential interaction are rarely considered. Here, we address this in an indicator species for a biodiverse riparian ecosystem in Australia's tropical savanna, an understudied region threatened by habitat loss and climate change. We investigate the effect of habitat, temperature and rainfall on nestling condition and subsequent survival in an individually marked population of the Endangered purple‐crowned fairy‐wren ( Malurus coronatus coronatus ). Leveraging a high‐quality 10‐year dataset of nestling measurements, we control for pertinent factors influencing growth (e.g. food provisioned) and quantify short‐ and long‐term survival with high accuracy. Higher ambient temperatures in the week after hatching reduced nestling body condition (mass relative to body size). Poor, degraded habitat (lower density of mid‐storey vegetation) decreased nestling body condition, regardless of temperature or rainfall. Lower body condition as a nestling did not affect survival to nutritional independence (12 weeks) but decreased survival from independence to adulthood (2 years). Poor habitat also directly decreased survival to adulthood, compounding this effect. Taken together, our results show that climate warming and habitat degradation are additive threats to nestling purple‐crowned fairy‐wrens that reduce survival to adulthood. Future research should address the mechanisms underlying the protective effect of high‐quality habitat and explore how exposure to these threats during development affects fitness in other species. Policy implications . Our study shows that improving habitat quality is critical for riparian wildlife as the climate warms and that supporting long‐term studies is important for detecting cryptic effects of anthropogenic threats. The Australian monsoonal savanna is projected to warm by 3.5°C by 2090, and our models predict an associated average of 2.2% decrease in purple‐crowned fairy‐wren survival. This could be offset by a 7% increase in average habitat quality, underscoring the importance of high‐density riparian habitat as a climate refuge. Conservation strategies for climate warming should protect high‐quality habitat and improve low‐quality patches, for example, through effective fire management and reduction of high‐intensity grazing.