Many coastal-dependent species have undergone large-scale population declines due to impacts from habitat loss, including American oystercatchers (Haematopus palliatus). Islands along the Big Bend region of Florida’s Gulf Coast provide important nesting habitat for oystercatchers, but reproductive success here is low and habitat degradation and loss are a major concern. To determine rates and characteristics of habitat loss, we quantified changes in island sizes within two major breeding areas of the Big Bend: the Barge Canal spoil islands and natural islands at Cedar Key. We digitized aerial photographs from the past ~ 40 years, measured area and shoreline retreat of nesting islands, and identified trends over time by fitting linear mixed effects models. The total area of the ten Barge Canal spoil islands decreased by 55% between 1979 and 2016. At Cedar Key, the total area of the six islands measured decreased by 39% between 1974 and 2016, 85% of which occurred after 1995, indicating an increase in erosion rates correlated with oyster reef declines. Changes in available nesting habitat varied between the Barge Canal and Cedar Key islands due to differences in physical attributes; however, all islands significantly decreased in size over time. Given the long life and high site fidelity of American oystercatchers, these islands may currently be acting as an ecological trap for this species. Climate change, sea-level rise, and loss of oyster reefs are likely to continue to drive oystercatcher habitat loss throughout their range; thus, creation and restoration of oyster reefs and nesting islands will become increasingly important.