During a period of 12 months in 2007 and 2008, a study of the parrot trade within Peru was carried out. In this study, 20 main wildlife markets were visited in eight cities in order to estimate the number of parrot species and individuals traded legally and illegally within a year. The study also gathered extra information from vendors and customers through informal interviews about the trade process. Additionally we contracted one person in two markets between February and May 2008 to monitor how many species and individuals entered the trade. During the study, four threatened species (the ‘Endangered’ Gray-cheeked Parakeet Brotogeris pyrrhoptera, the ‘Vulnerable’ Military Macaw Ara militaris, the ‘Vulnerable’ Yellow-faced Parrotlet Forpus xanthops and the ‘Near Threatened’ Red-masked Parakeet Aratinga erythrogenys) and one additional species listed in CITES Appendix 1 (Scarlet Macaw Ara macao) were found being traded. Thirty-four species were recorded in total, 33 of which are native to Peru (representing 63% of the 52 known Peruvian parrot species) and one of which (Monk Parakeet Myiopsitta monachus) is native to Bolivia and Argentina. Our results show that even for the seven species which can be legally traded in Peru, the number of individuals being traded can greatly exceed the numbers that can officially be traded legally. We directly counted 4,722 parrots for sale and using a measured detection rate of 3% we estimate a total market size in the cities surveyed of between 80,000 and 90,000 individuals. As our surveys sampled only 8 out of Peru’s 24 departmental capitals and there are also other large cities, these numbers are likely to represent only a part of the total trade in Peru. To the best of our knowledge this is one of the first detailed studies of the internal trade in a source country for the international parrot trade. Our results suggest that such internal trade is likely to be a significant conservation issue that has previously been largely overlooked.