The first section of the paper discusses the background to the use of habitats as indicators for biodiversity including a discussion of the range of definitions that have been used. Habitats can now be recorded consistently across Europe at different time intervals in order to estimate stock and change as an indicator of biodiversity that is efficient and relatively easy to record. Habitats are considered to be the third level in a hierarchy with biomes and landscapes as higher categories and vegetation, species and genetic diversity as lower levels. An advantage of using habitats is that many other taxa are associated with them and examples are given from the literature. Examples are also given of the association between habitats and species in European Environmental Zones using expert judgement. Statistical analysis using a range of procedures can also be used to assess the association between species and habitats. Reliable data on the extent, status and changes in European habitats is essential for policy makers across the European Union and would also be important for promoting species conservation.