They are found in open areas of grassland or lava rock, and hunt by flying low over these areas, feeding on rats, lava lizards and birds. Most owls hunt at night, however the Galapagos short-eared owl has adapted to hunt in the daytime as well, to avoid competition with the Galapagos hawk. They are able to hunt birds much larger than themselves, such as boobies, by striking at the back of the neck, taking the bird by surprise. 

The Galapagos short-eared owl has developed a unique hunting behaviour on Genovesa island, at a colony of storm petrels. The petrels nest deep in tunnels in the lava rock, usually out of reach of the owls. However the owls have learnt to stalk nearby, watching the petrels as they enter and leave the tunnels. The owls then wait close by for the petrel to leave the tunnel and catch them unawares. Another technique they use is to hide in the entrance of the tunnel to grab a petrel as it flies in. 

They tend to nest under trees and shrubs, and have one clutch per year of two to four eggs. The eggs hatch in three to six weeks, and the young are ready to fledge at four weeks old. The juvenile birds are ready to mate and reproduce after one year. Their population was estimated to be around 9,000 pairs in the 1980s, but further research is needed to calculate their current population status.