Fossils of Megarachne have been discovered in deposits of Late Carboniferous age, from the Gzhelian stage, in the Bajo de Véliz Formation of San Luis, Argentina.

Due to their fragmentary fossil record and similarities between the genera, some researchers have hypothesized that Megarachne and two other members of its family, Mycterops and Woodwardopterus, represent different developmental stages of a single genus.

Among them, the raised lunules (the vaguely moon-shaped ornamentation, similar to scales) and the cuticular sculpture of the mucrones (a dividing ridge continuing uninterrupted throughout the carapace, the part of the exoskeleton which covers the head) are especially important since these features are characteristic of eurypterids.

The holotype (now stored at the Museum of Paleontology at the National University of Córdoba) was recovered from the Pallero Member of the Bajo de Véliz Formation of Argentina, which has been dated to the Gzhelian age: 303.7 to 298.9 million years ago.

[7][5] Hünicken wrongly identified the specimen as a mygalomorph spider (the group that includes tarantulae) based on the shape of the carapace; the 15-millimetre (0.59 in) wide, circular eye tubercle (round outgrowth) located in the center of the head between the two eyes; and a circular structure behind the first body-segment - which he identified as the "moderately hairy" abdomen.

[8][6] The identification of the specimen as a spider was doubted by some arachnologists, such as Shear and colleagues (1989), who stated that while Megarachne had been assigned to the Araneae, it "may represent an unnamed order or a ricinuleid".

This specimen had preserved parts of the front section of the body, as well as coxae possibly from the fourth pair of appendages, and was recovered from the same locality and horizon.

[2] Selden and colleagues (2005) concluded that, despite only being represented by two known specimens, Megarachne is the most complete eurypterid discovered in Carboniferous deposits in South America so far.

Within the stylonurines, Megarachne is a member of the superfamily Mycteropoidea and its constituent family Mycteropidae; which includes the close relatives Woodwardopterus and Mycterops.

Brachyopterus Kiaeropterus Brachyopterella Alkenopterus Rhenopterus Parastylonurus Stylonurella Pagea Stylonurus Laurieipterus Ctenopterus Lamontopterus Kokomopterus Hardieopterus Tarsopterella Hallipterus Drepanopterus Cyrtoctenus Hibbertopterus Woodwardopterus Megarachne Mycterops Both known specimens of Megarachne have been recovered from the Bajo de Véliz Formation of Argentina, dated to the Gzhelian stage of the Late Carboniferous.

[12] Similar Late Carboniferous floodplains with fossilized remnants discovered in modern-day Australia suggest a flora dominated by different types of pteridosperms with pockets of isoetoid lycopsids.

[13] During Megarachne's time, Argentina and the rest of South America was part of the ancient supercontinent Gondwana which was beginning to fuse with the northern continents of Euramerica, North China, Siberia and Kazakhstania to form Pangaea.

Instead, the blades on the frontal appendages of Megarachne would have allowed it to sweep-feed, raking through the soft sediment of the rivers it inhabited in order to capture and feed on small invertebrates.