[3] Their distribution is due to decreased susceptibility to predation because of complexity in higher habitats in Polygonum beds.

[3] It is nocturnal, remaining hidden among the vegetation by day, and emerging at night to feed on plankton.

[6] It is an important prey item for a number of birds and fishes,[7] such as black bass,[8] and may be considered a keystone species.

[8] They are also used as host by a parasitic isopod, Probopyrus pandalicola, that makes the female shrimps sterile and affects the growth of the male's sex characteristics.

[8] Palaemon paludosus are omnivores that mainly consume algae and aquatic insects[8] along with various species of diatoms such as Fragilaria and Nivicula.