Although unidentified species of Pipistrellus had been previously reported from Madagascar since the 1990s, P. raceyi was not formally named until 2006.

It is apparently most closely related to the Asian species P. endoi, P. paterculus, and P. abramus, and its ancestors probably reached Madagascar from Asia.

In the skull, the rostrum (front part) is less flat than in related species and the supraorbital ridges (above the eyes) are prominent.

If this is true, the ancestors of P. raceyi presumably reached Madagascar from Asia, not from Africa like most of the island's bat fauna.

[9] P. raceyi has short tibiae (lower leg bones) and small feet and the tail is shorter than the head and body.

In the baculum (penis bone), the shaft is long and narrow and slightly curved.

[8] The length of the penis and baculum distinguish P. raceyi from all comparably sized African and Malagasy vespertilionids.

[10] In the skull, there is a well-defined lowered area in the middle of the rostrum (front part), which nearly touches the back margin of the large, V-shaped nasal aperture (opening for the nose).

[13] The braincase is of average size and bears a poorly developed sagittal crest on its roof.

The first two lower molars (m1 and m2) have the back group of cusps (talonid) larger than the front one (trigonid), and m3 is again smaller.

[11] Pipistrellus raceyi is known from four places on Madagascar, all below 80 m (260 ft) altitude, of which two are on the west and two on the east side of the island.

[9] Among the eastern collection sites, Kianjavato is a rural town surrounded by farmland and secondary forests, where P. raceyi were collected while leaving a hollow in the concrete wall of a house and in a mistnet over a river,[15] and Tampolo is in a heavily disturbed agriculturally used area.

[16] The IUCN Red List has assessed Pipistrellus raceyi as "Data Deficient" because of insufficient knowledge about its abundance and habitat requirements.

Although deforestation may pose a threat, each of the collection sites has some sort of forest protection measures in place.