It is becoming increasingly clear that species of smaller body size tend to be less vulnerable to contemporary extinction threats than larger species, but few studies have examined the mechanisms underlying this pattern. In this paper, data for the Australian terrestrial mammal fauna are used to ask whether higher reproductive output or smaller home ranges can explain the reduced extinction risk of smaller species. Extinct and endangered species do indeed have smaller litters and larger home ranges for their body size than expected under a null model. In multiple regressions, however, only litter size is a significant predictor of extinction risk once body size and phylogeny are controlled for. Larger litters contribute to fast population growth, and are probably part of the reason that smaller species are less extinction-prone. The effect of litter size varies between the mesic coastal regions and the arid interior of Australia, indicating that the environment a species inhabits mediates the effect of biology on extinction risk. These results suggest that predicting extinction risk from biological traits is likely to be a complex task which must consider explicitly interactions between biology and environment.