Its natural habitat is subtropical or tropical moist lowland forests.

This taxon (now subspecies) was formerly considered as one of the 15 recognised subspecies of what was then known as the variable dwarf kingfisher (Ceyx lepidus or Alcedo lepidus).

[1] A molecular phylogenetic study published in 2013 found that most of the insular subspecies had substantially diverged from one another.

[2] The variable dwarf kingfisher was therefore split and 12 of the subspecies, including the Malaita dwarf kingfisher, were promoted to species status.

[3] Clements and IOC have merged this taxon into the Guadalcanal dwarf kingfisher, Ceyx nigromaxilla.