[3] The species was initially described under Steinera,[4] but was removed in 1982 when the genus was revised by Aino Henssen and Peter Wilfred James.

[6] Degelia neozelandica is most widely found in New Zealand, on both Macquarie and South Islands, but has also been found in a single alpine locality in Tasmania, Australia.

[3] It grows on fine sandy soil in subalpine and alpine grasslands in altitudes of between 900 and 1,800 metres (2,950 and 5,910 feet).

[5] Degelia neozelandica has several associated species with which it is often found.

These include Parmeliella crassa,[7] Pannaria hookeri, Solorina spongiosa, Collema coccophorum, Lecanora atra, Pertusaria dactylina, Psoroma buchanani, and Psoroma fruticulosum.