Effective detection techniques are important for wildlife monitoring and conservation applications and are especially helpful for species that live in complex environments, such as arboreal animals like koalas (Phascolarctos cinereus). The implementation of infrared cameras and drones has demonstrated encouraging outcomes, regardless of whether the detection was performed by human observers or automated algorithms. In the case of koala detection in eucalyptus plantations, there is a risk to spotters during forestry operations. In addition, fatigue and tedium associated with the difficult and repetitive task of checking every tree means automated detection options are particularly desirable. However, obtaining high detection rates with minimal false alarms remains a challenging task, particularly when there is low contrast between the animals and their surroundings. Koalas are also small and often partially or fully occluded by canopy, tree stems, or branches, or the background is highly complex. Biologically inspired vision systems are known for their superior ability in suppressing clutter and enhancing the contrast of dim objects of interest against their surroundings. This paper introduces a biologically inspired detection algorithm to locate koalas in eucalyptus plantations and evaluates its performance against ten other detection techniques, including both image processing and neural-network-based approaches. The nature of koala occlusion by canopy cover in these plantations was also examined using a combination of simulated and real data. The results show that the biologically inspired approach significantly outperformed the competing neural-network- and computer-vision-based approaches by over 27%. The analysis of simulated and real data shows that koala occlusion by tree stems and canopy can have a significant impact on the potential detection of koalas, with koalas being fully occluded in up to 40% of images in which koalas were known to be present. Our analysis shows the koala’s heat signature is more likely to be occluded when it is close to the centre of the image (i.e., it is directly under a drone) and less likely to be occluded off the zenith. This has implications for flight considerations. This paper also describes a new accurate ground-truth dataset of aerial high-dynamic-range infrared imagery containing instances of koala heat signatures. This dataset is made publicly available to support the research community.