Listed as Endangered because this species is known from only two colonies. The population in the Auco reserve is declining, while populations outside the reserve in restored habitats have been increasing. The area of occupancy is approximately 72 km2 , which meets the criteria for Endangered. Population estimates have also show a 36% decline over the past 3 generations (15 years). This species was previously thought to be extinct in the 1960s but has since been rediscovered. Some habitat continues to decline due to proximity near mining sites.
Since the time of the ancient Incas chinchilla fur has been highly prized by humans. Historically, the main threat to this species was overhunting for its pelt. Between 1895 and 1921 over three million chinchilla pelts including a small number of live animals were exported from Chile. Some authors report that more than 21 million chinchillas were actually killed between 1840 and 1916. Although these animals subsequently became protected, populations have continued to decline due to habitat destruction and degradation from grazing cattle and goats, firewood extraction and mining. It has been suggested that the current population may now be too small to be viable.
This species has been included in CITES Appendix I since 1977. National legislation to protect the species has been in place since 1929. However, this was not efficiently enforced until the establishment of the Reserva Nacional Las Chinchillas in Auco, Chile in 1983. About 5,000 individuals are located on private unprotected land. Several key conservation actions have been identified. These include education and awareness programmes for local people, alternative forms of income generation, possible eradication of goats from the landscape, increasing the area of land under protection, and restoration of degraded habitat.
The ecology of chinchillas is fairly well known. They are most active at dawn and dusk and during the night, although they have occasionally been observed outside of their holes on sunny days. Their diet consists of any available vegetation. Chinchillas are social animals, mostly living in colonies in burrows or tunnels created within and around the cardon plant (Puya berteroniana) found on equatorial slopes. Colonies were previously reported to contain up to 100 individuals although are likely to be much smaller today. The lifespan is probably about 10 years in the wild, although some captive individuals have lived for more than 20 years. Sexual maturity in both sexes occurs on average at 8 months, but may occur as early as 5.5 months. The gestation period lasts 111 days which is relatively long for such a small mammal. Females can have up to two litters per year. Litters can range from 1-6 pups, but around two is the average. These young are born with eyes open and fully furred. Chinchillas are about the size of a small rabbit. They have a broad head, large mouse-like ears and large black eyes. The body is small with a long bushy tail measuring up to one third of the body length. The characteristic that they are best known for is their plush fur. Whereas humans have one hair from each follicle, a chinchilla has more than 50 hairs from a single follicle. Their silky fur is extremely dense and soft. It is bluish, pearl or brownish grey in colouration above and yellowish white below. Chinchillas have strong hind legs, enabling them to run and jump with ease. They are sexually dimorphic, with adult females being larger than males.