It was considered a subspecies of the Oriental bay owl (Phodilus badius) but is now treated as a full species due to its distinctive call, plumage and disjunct distribution.

The Sri Lanka bay owl was described by the English politician and naturalist Allan Octavian Hume in 1873 but it was only in 1877 that he introduced the binomial name Phodilus assimilis.

[3][4] The genus name Phodilus is from the Ancient Greek phōs for "light" or "daylight" and deilos for "timid" or "cowardly".

[5] It was earlier considered a subspecies of the Oriental bay owl Phodilus badius, but now treated as a separate species based on differences in call and plumage.

The breeding season is in winter when the distinctive song consisting of multiple whistles with inflections can be heard.