The Endangered Species Act (ESA) requires that areas be designated as critical habitat for species that are protected under the Act. Once designated, critical habitat is protected from “destruction or adverse modification” by Section 7(a)(2) of the ESA, which applies to any action authorized, funded, or carried out by a federal agency, including permits and other authorizations issued to private landowners and resource users. In 1978, Congress enacted extensive amendments to the ESA that were intended to limit the scope of critical habitat to areas essential for the survival of protected species. Based on these amendments, the U.S. Fish and Wildlife Service and the National Marine Fisheries Service adopted regulations that recognized critical habitat’s limited role in conserving species, including a definition of “destruction or adverse modification” that emphasized impacts to the protected species’ survival. In Sierra Club v. U.S. Fish and Wildlife Service and Gifford Pinchot Task Force v. U.S. Fish and Wildlife Service however, the Fifth Circuit and the Ninth Circuit respectively held that the agencies’ adverse modification definition is unlawful and that the purpose of critical habitat is to recover species. These cases have strongly influenced the administration of the ESA over the past decade and the Services recently relied on these cases to justify regulations that will transform critical habitat into recovery habitat. The authors maintain that a reassessment of the role of critical habitat is needed to ensure that the regulatory and judicial treatment of critical habitat conforms to the intent of Congress.