The species plays an important role in rock colonisation, forming moss "aprons" or mats that can store significant moisture and provide microhabitats for other plants.

Campylopus bicolor was first described by the German bryologist Karl Müller, and the combination was later made by William Wilson in Joseph Dalton Hooker's work Flora Novae-Zelandiae (1854).

[5] While C. atroluteus from South Africa was initially considered a subspecies of C. bicolor due to morphological similarities, molecular studies have since revealed them to be distinct species.

The genetic distance between them is characteristic of separate species, with no evidence of gene flow between the South African and Australian/New Zealand populations, suggesting long-term geographical isolation.

[4] A less common variant of this moss, known as variety ericeticola, differs from the typical form by having leaves that end in hair-like points rather than hood-like tips.

While this variety has been observed growing alongside the typical form, suggesting it may be genetically distinct, some specimens have been found with both types of leaf tips on the same plant.

[4] Historical collections demonstrate the species' long-term presence in Australia, including specimens from Waverley Cemetery, Sydney, dating back to 1899.

The moss cushions accumulate 1–2 cm of humus sand and gravel and exist in a constant state of build-up and break-down, with flat and domed forms representing different stages of development.