M. paracosma lives in a wide variety of habitats including tussock grasslands, shrubland, and damp native beech or podocarp forests, at a range of altitudes from around sea-level up to 1200 m. Adults of this species are on the wing from October to February and are day flying, although they are attracted to light at night.

[2] The male lectotype specimen, collected by Meyrick at Lake Wakatipu on the 15 December 1882, is held at the Natural History Museum, London.

[3] Meyrick described the species as follows: Forewings yellowish-ochreous, with a wedge-shaped whitish streak from middle of costa, and some irregular dark fuscous suffusions.

[7][5] M. paracosma lives in a wide variety of habitats including tussock grasslands, shrubland, and damp native beech or podocarp forests but are likely to be found near watercourses or moist areas as a result of their larvae existing on periphyton.

[5] The larvae of M. paracosma require moist periphyton and are believed to feed on a variety of fungi, algae, mosses, liverworts and fern sporangia.