It was first described by English naturalist George Robert Waterhouse, and named in honor of Edward Smith-Stanley, 13th Earl of Derby.

Derby's woolly opossum is the largest in its genus, with a total length of 60 to 70 centimetres (24 to 28 in) and weight between 200 and 400 grams (7.1 and 14.1 oz).

[6] A 1955 revision of marsupial phylogeny grouped Caluromys, Caluromysiops, Dromiciops (monito del monte) and Glironia (bushy-tailed opossum) under a single subfamily, Microbiotheriinae, noting the dental similarities among these.

A 1977 study argued that these similarities are the result of convergent evolution, and placed Caluromys, Caluromysiops and Glironia in a new subfamily, Caluromyinae.

[8] The following seven subspecies are recognized:[6][9] The cladogram below, based on a 2016 study, shows the phylogenetic relationships of Derby's woolly opossum.

[3] Derby's woolly opossum is nocturnal (active mainly at night), solitary, and spends most of the day in nests made of dead leaves in cavities in the upper reaches of trees.

[12] Diet comprises fruits of pepper vines and Cecropia species, nectar of the balsa tree, Mabea occidentalis and Trichanthera gigantea, small invertebrates and vertebrates.

[6] Derby's woolly opossum inhabits deciduous and moist evergreen forests up to an altitude of 2,600 metres (8,500 ft).

The range extends from Veracruz in southern Mexico southward into South America to western Ecuador and Cauca River valley in Colombia.