[2] Until recently, scientific knowledge of this rare species was limited to 11 skins collected in the late nineteenth century.

A 2012 study revealed the extension of distributional range of woolly flying squirrel in upper Neelum valley, Azad Jammu & Kashmir.

It has also been discovered in the Indian state of Uttarakhand and Jigme Dorji National Park in Bhutan, indicating that it may have a wider range than previously thought.

[2][5] Its habitat is mainly characterized by steep slopes, difficult to approach cliffs and mixed vegetation including Abies pindrow, Betula utilis, Juniperus macropoda, Pinus wallichiana, Taxus wallichiana, Skimmia laureola, Potentilla eriocarpa, Poa bactriana, Bergenia stracheyi, Artemisia vulgaris, and Bistorta affinis.

[citation needed] The western woolly flying squirrel was thought to be extinct for 70 years until being rediscovered in 1994 by Dr. Peter Zahler, of the Wildlife Conservation Society.