Ten Yellow-crested Abbott's cockatoos were found on the Masalembu archipelago off Java island, the Indonesian Cockatoo Conservation group told AFP.
"We were excited when we found them in residential areas on Masakambing island," researcher Dudi Nandika said.
The group included four breeding pairs and two juveniles.
Despite the discovery the Yellow-crested Abbott's cockatoo (Cacatua sulphurea abbotti) remains the rarest species of the bird on earth, he said.
It hasn't been seen since scientists observed a group of five in 1999, researcher Dwi Agustina said.
It was assumed that number was too low for the cockatoos to reproduce and the species had died out, Agustina said.
The local population of the cockatoo has been threatened by hunting and capture for the pet trade.