Psamathe was discovered by Scott S. Sheppard and David C. Jewitt in 2003 using the 8.2 meter Subaru Telescope.

[5] Before it was officially named on February 3, 2007 (IAUC 8802), it was known by the provisional designation S/2003 N 1.

It orbits Neptune at a distance of between 25.7 and 67.7 million km (for comparison, the Sun-Mercury distance varies between 46 million and 69.8 million km) and requires almost 25 Earth years to make one orbit.

Given the similarity of Psamathe's orbital parameters with Neso (S/2002 N 4), it was suggested that both irregular satellites could have a common origin in the breakup of a larger moon.

[5] Both are farther from their primary than any other known moon in the Solar System.