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Leadbeater’s possum evolved up to 20 million years ago. It was first scientifically described by Frederick McCoy in 1867 on the basis of two specimens sent to the recently established Melbourne Museum. The specimens had been collected by Jim Peters from the Bass River area of West Gippsland. Over the following decades the swamp forests of the area were  drained and cleared to make way for agriculture. By the early 1900s only a handful of specimens had been collected, the forests were gone and it was soon presumed the species was extinct.

By 1960 the animal had not been seen alive for 50 years and it was declared, “almost certainly extinct”. But on 3 April 1961, the species was rediscovered by naturalist Eric Wilkinson in the forests at Cambarville and Tommy’s Bend, near Marysville, The first specimen in more than 50 years was collected later in the month.  Extensive searches followed and it was established that the existing population is limited to Victoria’s Central Highlands. However, the availability of suitable habitat is critical: Leadbeater’s possum requires three essential components, big, old hollow-bearing trees in which it can build its nest, a mid-storey of wattles in which it feeds on sap and a dense under-storey providing connectivity so that at can move safely around. Conservation efforts for Leadbeater’s possum involve protection of remaining old-growth trees, and maintenance of mature stands that will, in time, attain hollow-bearing age and provide future habitat.

The combination of 40-year-old regrowth (for food) and large dead trees left still standing after the 1939 fires (for shelter and nesting) allowed the Leadbeater’s possum population to expand to an estimated peak of about 5000 in the early 1980s. From its peak in the 1980s, the Leadbeater’s possum population was expected to further decline rapidly, by as much as 90%, due to a habitat bottleneck as the dead trees decayed and eventually collapsed. The February 2009 Black Saturday bushfires destroyed 43% of Leadbeater’s possums reserved habitat in the Central Highlands, possibly halving the wild population. A study published in 2014 concluded the Mountain Ash ecosystem in the Victorian Central Highlands is Critically Endangered, with a high probability it will collapse within 50 years.