They hunt mainly by flying out from perches on trees, shrubs, or cacti to hawk flying insects or by flying over open ground. They often hover over insect prey, causing the insects to take flight, then capture them in mid air. They also pluck insects from tree branches or the ground without taking off, and forage by walking on the ground. Elf Owls are occasionally attracted to campfires or other bright lights in their quest for flying insects. Prey are carried to a nearby perch, where they are torn apart before being eaten.
Pellets are tiny, dry and loosely formed.
They contain mainly insect body parts and tend to disintegrate soon after ejection. On moonlit nights calling occurs continuously all night. The female selects the nest cavity and begins to roost in it prior to laying eggs to prevent occupation by other hole-nesting birds. Elf Owls are entirely dependent on woodpecker cavities for nest sites, both in cacti and deciduous trees, so there is some competition with nesting woodpeckers over cavities. Northern Flickers and Gila Woodpeckers in saguaro cacti, and Acorn Woodpeckers in woodlands, provide most of the cavities used for nesting.