[3] Both Neotrypaea californiensis and the mud shrimp Upogebia pugettensis live in mudflats and sandy substrates in the intertidal zone of estuaries in western North America.

N. californiensis is found from Mutiny Bay, Alaska[6] to Punta Abreojos, Mulegé, Baja California Sur, Mexico.

[8] The burrows made by N. californiensis have many branches,[9] and a number of other animals live in them, including snapping shrimp of the genus Betaeus,[3][10] the copepod Clausidium vancouverense,[11] and the crab Scleroplax granulata.

[13] Predators of N. californiensis include gray whales (Eschrichtius robustus),[14] bottom-dwelling fish,[9] and Dungeness crabs (Metacarcinus magister).

[15] N. californiensis is used as fishing bait, and is frequently transported alive between U.S. states, prompting fears that existing population structure may be obliterated, and that it could introduce the castrating parasitic isopod Ione cornuta outside its native range.