[3] The phantasmal poison frog is known only from a number of locations in central Ecuador on the Andean slopes of Bolívar Province, at heights of between 319 and 1,769 m (1,047 and 5,804 ft) above sea level.

Its natural habitat is very similar to other species of the poison dart frog family in the leaf litter on the floor of the tropical forest, especially near streams, and in wetlands.

[1] The species inhabits the Chocoan tropical and subtropical rain forest.

Genetic analysis places phantasmal poison frog clades within E. machalilla and suggests that the phantasmal poison frog diverged recently via either peripheral speciation or high phenotypic divergence.

This is because of its limited range, estimated to be less than 5,000 square kilometres (1,900 sq mi) and the apparent decline in numbers of this species.