The Terai Arc Landscape (TAL), characterized by a mosaic of forest and grassland assemblages along south of the Himalaya, is a globally important ecoregion and supports high densities of tiger populations. We assessed the current status of tiger distribution and its correlates such as habitat contiguity and prey availability in TAL (ca. 15,000 km2) between July, 2002 and March, 2004 based on Remote Sensing and Geographical Information System (GIS) technologies, and extensive field surveys. Tiger distribution was highly variable across the landscape and on an average it used about 12% (± 18.1 SD) of the sampled area. Anthropogenic factors have caused decisive disruption to habitat contiguity. Consequently, tiger habitat in the Indian portion of TAL is divided into nine fragmented blocks, with poor or no connectivity between the subpopulations. However, the habitat blocks on the eastern TAL are connected through the forests across Nepal, placing the populations in five larger units. Each of these units has at least one key forest patch in which tigers have higher probability of persistence and potentially act as a source for adjoining patches. Prey availability was encouraging in most parts of the landscape, with chital (Axis axis), sambar (Cervus unicolor) , nilgai (Boselaphus tragocamelus) and wild pig (Sus scrofa) occurring interchangeably in considerable proportion (50% or above). Besides the habitat contiguity, tiger occurrence was positively related to chital, sambar and wild pig that had wider spatial distributions, and showed negative response to human associated disturbances. We recognize that designing framework for prioritizing tiger conservation in TAL would have to involve patch properties, source-sink populations and prey biomass densities.