A high‐quality reference genome can be a valuable resource for threatened species by providing a foundation to assess their evolutionary potential to adapt to future pressures such as environmental change. We assembled the genome of a female hihi (Notiomysits cincta), a threatened passerine bird endemic to Aotearoa New Zealand. The assembled genome is 1.06 Gb, and is of high quality and highly contiguous, with a contig N50 of 7.0 Mb, estimated QV of 44 and a BUSCO completeness of 96.8%. A male assembly of comparable quality was generated in parallel. A population linkage map was used to scaffold the autosomal contigs into chromosomes. Female and male sequence coverage and comparative genomics analyses were used to identify Z‐, and W‐linked contigs. In total, 94.6% of the assembly length was assigned to putative nuclear chromosome scaffolds. Native DNA methylation was highly correlated between sexes, with the W chromosome contigs more highly methylated than autosomal chromosomes and Z contigs. 43 differentially methylated regions were identified, and these may represent interesting candidates for the establishment or maintenance of sex differences. By generating a high‐quality reference assembly of the heterogametic sex, we have created a resource that enables characterization of genome‐wide diversity and facilitates the investigation of female‐specific evolutionary processes. The reference genomes will form the basis for fine‐scale assessment of the impacts of low genetic diversity and inbreeding on the adaptive potential of the species and will therefore enable tailored and informed conservation management of this threatened taonga (treasured) species.