Pixie is a tiny koala joey weighing only about 200 grams and easily fits into one hand.

Key points: A female koala and her joey were rescued after being hit by a car in Port Macquarie on the NSW mid-north coast

A female koala and her joey were rescued after being hit by a car in Port Macquarie on the NSW mid-north coast The mother is recovering at the Port Macquarie Koala Hospital and the joey is being raised in home care

The mother is recovering at the Port Macquarie Koala Hospital and the joey is being raised in home care The rescue has prompted renewed warnings for drivers to take care in known koala areas

She is just a few months old and would normally still be safely hidden from the world inside her mother's pouch.

Named Ocean Drive Pixie by her carers, the joey was discovered after her mother was hit by a car on a busy road in Port Macquarie on the New South Wales mid-north coast.

The badly injured koala was taken to the Port Macquarie Koala Hospital, where carers discovered she had a small joey in her pouch.

A decision was quickly made to put the joey into home care.

"Because the mother was in such bad shape we thought it best to take the joey out of the pouch. Lactation ends up stopping," said Cheyne Flanagan, the koala hospital's clinical director.

"Koala mothers are very protective of their joeys, but she just sat back and allowed me to take the joey out of her pouch.

Pixie's mother, Ocean Drive Thomasina, is recovering at the Port Macquarie Koala Hospital. ( ABC Mid North Coast: Emma Siossian )

"That really indicated where her head was at; she had a lot of brain injury.

"She [the mother] is starting to come around the corner slowly.

"She's starting to eat a bit more. She's not really recognising leaf yet, we've got to actually put it in her mouth, but she's taking some soft foods."

Signs looking good for 'premmie' koala joey

Pixie would ordinarily have been developing in her mother's pouch for another few months.

"It's a long road, the female koala in her lactation period gives antibodies during the whole lactation and of course we can't do that," Ms Flanagan said.

"They are very susceptible to infection and that's what knocks them down. It's like trying to deal with a really premmie human baby."

Pixie will receive a special marsupial formula until she's old enough to eat leaves. ( ABC Mid North Coast: Emma Siossian )

Ms Flanagan said Pixie was doing well so far and in the past week had gained 5 grams and had also grown some fluffy hair.

"So far so good. She's a mighty little thing, she's eating well now," she said.

"She was 195 grams when we first got her. She let me know it when I got her out of the pouch too, she squawked and was not a happy camper at all, and no injuries, none at all."

Round-the-clock home care

Pixie tucks down into a makeshift pouch in the home of her carer. ( ABC Mid North Coast: Emma Siossian )

Barbara Barrett, a carer at the koala hospital for nearly two decades, is hand-raising Pixie and said she was the smallest joey she'd had in care.

Ms Barrett carries Pixie in makeshift pouch under her clothing and against her chest to ensure she stays warm, both day and night.

"It's a 24-hour-a-day job. I have to feed her every three to four hours," she said.

"She stays against my chest around the clock. I sleep on my back mainly. If I roll over I just support her with my arm underneath her.

Carer Barbara Barrett looks after the koala joey around the clock. ( ABC Mid North Coast: Emma Siossian )

"I'm really happy with her; she's really still bright and she's strong.

"She has a special powdered milk formula for marsupials, and as she grows it goes up in strength."

Ms Barrett said being a koala carer was a special job.

"It is very satisfying. It can be very rewarding and also very sad. You don't have success with all of them, but the rewards outweigh that," she said.

Joey needs a mother's poo

The Port Macquarie Koala Hospital cares for injured and sick koalas from a wide area. ( ABC Mid North Coast: Emma Siossian )

When she's a bit bigger, Pixie will eventually move on to eating eucalypt leaves, but there's a step that has to occur before then.

Koala Hospital clinical director Cheyne Flanagan has urged drivers to take care in known koala areas. ( ABC Mid North Coast: Emma Siossian )

"We have to do something special called giving her pap, which is a special maternal poo, that the females give to their joeys," Ms Flanagan said.

"When they eat that it allows their gut to be inoculated with the right bacteria and they can eat eucalypt leaf after that. It's usually around five months' gestation.

"It's quite funny: they sit there covered in this green poo and they love it!"

All being well, Pixie will eventually be transferred to a yard at the koala hospital and will learn how to fend for herself before being released into the wild.

Drivers urged to be on the lookout as koala numbers decline

A public artwork at the Port Macquarie Koala Hospital highlights some of the threats koalas are facing. ( ABC Mid North Coast: Emma Siossian )

Ms Flanagan said the loss of habitat and disease were the biggest issues affecting koalas, with car strikes also a major problem.

"Koala numbers are really in serious decline, the way we are going it's just this downhill slide," she said.

"Queensland and NSW are the worst as we are the ones with so much urbanisation and development, mixed in with a lot of disease, which is affected by the impact on habitat.

"We all think the koalas are crossing the road, but in fact it's the road crossing their habitat, so when you are going along these roads, slow down.

"Use your peripheral vision to look on the sides of the road in case something comes out."