They are found in seagrass beds or areas with soft silty or muddy bottoms from Brisbane on the east coast to Shark Bay on the west, as well as around Tasmania.

Southern dumpling squid are nocturnal and during the day hide in sand or mud covered in a mucus-lined coat of sediment.

The light organ, which is butterfly-shaped, is situated in the mantle cavity and is used to cancel out the bobtail squid's silhouette.

Depending on temperature incubation can take up to four and a half months, because of this the eggs must be comparatively large to provide enough yolk for successful embryonic development.

Parent Southern Dumpling Squid do not look after their young however the hatchlings are highly developed when born and are capable of catching prey up to twice their size.