The term bilby is a loan word from the Yuwaalaraay Aboriginal language of northern New South Wales, meaning long-nosed rat.

Reid based his description on a specimen that he erroneously stated to have come from Van Diemen's Land (now Tasmania), where the species has not occurred in historical times.

However, noting how different it was from other members of the genus, he added that "should more of the same form be discovered, the above characters would constitute a subgenus to which the name of Macrotis might be applied".

[13] The following year, Richard Owen read a paper before the Zoological Society of London, in which he proposed to erect a new genus for this species, named Thylacomys.

Compared to bandicoots, they have a longer tail, bigger ears, and softer, silky fur.

Unlike bandicoots, they are excellent burrowers and can build extensive tunnel systems with their strong forelimbs and well-developed claws.

A bilby typically makes several burrows within its home range, up to about a dozen; and moves between them, using them for shelter both from predators and the heat of the day.

[18] Before the extreme contraction of its range to remote northern desert areas, the species was well known around Adelaide, especially in the city parklands,[19][20] and it was also recorded as living around Perth.

[26] Communication remains difficult between bilbies due to poor eyesight, but since these marsupials usually live alone or in very small groups, this obstacle is not incredibly formidable.

[28] Females become reproductively active at six months of age and can breed all year round if conditions are favourable.

[24] Greater bilbies are a vulnerable species as classified by IUCN, their existence threatened by habitat loss and change as well as the competition with other animals.

[citation needed] There is a national recovery plan for saving these animals: this program includes breeding in captivity, monitoring populations, and re-establishing bilbies where they once lived.

[31] Save the Bilby Fund CEO Kevin Bradley estimated in December 2021 that the animal had been pushed back to around 10% of their former range, which covered 70% of Australia.

[33] A National Bilby Day is held in Australia on the second Sunday in September to raise funds for conservation projects.

In July 2012 it was reported that the population at Currawinya has been affected by feral cats that had gained access into the protected area after the wire netting had rusted after flooding.

[41] The high-salinity flood water had pooled around sections of the fencing, and once parts of it had rusted the cats had entered the reserve through the holes.

[46] There is a highly successful bilby breeding program at Kanyana Wildlife Rehabilitation Centre,[47] near Perth.

The knowledge of the Martu people of the Western Desert has been incorporated into models that predict bilby distributions.