Aim: A key assumption in species distribution modelling is that both species and environmental data layers contain no positional errors yet this will rarely be true. This study assesses the effect of introduced positional errors on the performance and interpretation of species distribution models. Location: Baixo Alentejo region of Portugal. Methods: Data on steppe bird occurrence were collected using a random stratified sampling design on a 1 km$^2$ pixel grid. Environmental data were sourced from satellite imagery and digital maps. Error was deliberately introduced into the species data as shifts in a random direction of 0-1 pixels, 2-3 pixels, 4-5 pixels and 0-5 pixels. Whole habitat layers were shifted by one pixel to cause mis-registration and the cumulative effect of one to three shifted layers investigated. Distribution models were built for three species using three algorithms with three replicates. Test models were compared with controls without errors. Results: Positional errors in the species data led to a drop in model performance, although not enough for models to be rejected. Model interpretation was more severely affected with inconsistencies in the contributing variables. Errors in the habitat layers had similar although lesser effects. Main conclusions: Models with species positional errors are hard to detect, often statistically good, ecologically plausible and useful for prediction, but interpreting them is dangerous. Mis-registered habitat layers produce smaller effects probably because shifting entire layers does not break down the correlation structure to the same extent as random shifts in individual species observations. Spatial autocorrelation in the habitat layers protects against positional errors to some extent but they should be minimised through careful field design and processing.