ABSTRACT This study is the second in a series that examines the habitat requirements and response to logging of koalas (Phascolarctos cinereus) inhabiting tall eucalypt forests of north-east NSW. It presents the findings of koala population and habitat monitoring surveys in Pine Creek State Forest and Bongil Bongil National Park using a combination of call-counting and direct observation (spotlighting). The 6400 ha study area was mapped into 6 zones of increasing koala habitat quality by ground survey of forest structure and floristics on a 200 m grid. The accuracy of habitat definition and mapping was tested by stratified transect counts of koala calls and sightings over two consecutive years (1997–98). Average koala density increased steeply and significantly, from 0.02 – 0.20 koalas/hectare, with increasing mapped habitat quality based on increasing forest age, structural complexity, local food tree species diversity, history of prior koala occurrence and decreased past logging intensity. This relationship was driven primarily by breeding females, with the number of male koala calls weakly or uncorrelated with koala sightings and mapped habitat quality. Male koalas were more widely and uniformly distributed than females, including areas of low quality, plantation, and intensively logged forest. This finding explains the discrepancy between our results and those of other recent studies which concluded that koalas are tolerant of intensive logging based on modelling of calling male koalas and reliance on an untested assumption that male calling is indicative of female breeding success. Koala density in a subset of the highest quality habitat was relatively stable at 0.28 koalas/ha (3 hectares/koala) over the long term (1997–98 and 2012–2023). Key characteristics of the forest koala population, including low stable density, large home ranges, preference for high food tree diversity and locally unique food trees (including Allocasuarina torulosa and Syncarpia glomulifera), are not adequately explained by existing koala habitat models. We present a new paradigm to explain regional variation in koala distribution, habitat and foraging preferences based on variations in foliage chemistry (toxicity and nutritional value) determined by the duration and stability of local plant-koala interactions in response to past fire, hunting, predation and logging disturbance history. We hypothesize that koala density in stable forest populations is regulated at low levels by a combination of selected and induced increases in leaf toxicity and decreases in leaf nutrition that limit koala browsing to benign levels of about 1-2% of annual leaf production. Large home ranges, complex mature forest structure, high food tree diversity and a specialized or diverse gut microbiome may be essential to allow females to rotate and change food trees frequently to minimize induced toxicity and select individual leaves with sufficient nutrients to support breeding and lactation with minimal risk of predation. High density koala populations (> 0.6/ha) occur primarily in areas where koalas have been introduced or re-introduced to planted habitats and natural areas where aboriginal hunters and dingoes were historically present but are now absent, and where food trees have not been selected for resistance to koala browsing pressure.