It has two long retractile filaments, located between the first two pairs of arms on its dorsal side,[4] which distinguish it from both octopuses and squids, and places it in its own order, Vampyromorphida, although its closest relatives are octopods.

[5] The first specimens were collected on the Valdivia Expedition and were originally described as an octopus in 1903 by German teuthologist Carl Chun, but later assigned to a new order together with several extinct taxa.

This suggests two ideas which are: a notable preservation bias called the Lazarus effect may exist; or an inaccurate determination of when vampire squids originally settled in the deep oceans.

[clarification needed] A webbing of skin connects its eight arms, each lined with rows of fleshy spines or cirri; the inner side of this "cloak" is black.

The filaments are analogous to a true squid's tentacles, extending well past the arms; but differ in origin, and represent the pair that was lost by the ancestral octopus.

The vampire squid is almost entirely covered in light-producing organs called photophores, capable of producing disorienting flashes of light ranging in duration from fractions of a second to several minutes.

[20] To cope with life in the suffocating depths, vampire squids have developed several adaptations: Of all deep-sea cephalopods, their mass-specific metabolic rate is the lowest.

Their blue blood's hemocyanin binds and transports oxygen more efficiently than in other cephalopods,[21] aided by gills possessing an especially large surface area.

The animals have weak musculature and a greatly reduced shell,[22] but maintain agility and buoyancy with little effort because of sophisticated statocysts (balancing organs akin to a human's inner ear)[23] and ammonium-rich gelatinous tissues closely matching the density of the surrounding seawater.

The vampire squid's ability to thrive in OMZs also keeps it safe from apex predators that require a large amount of oxygen to live.

[24] The vampire squid's large eyes and optic lobes (of their brain) may be an adaptation for greater sensitivity to distant bioluminescence; signs of animals, such as prey aggregations or potential mates.

If disturbed, it will curl its arms up outwards and wrap them around its body, turning itself inside-out in a way, making itself seem larger and exposing the spiny projections on its tentacles (the cirri).

[28] This luminous barrage, which may last nearly 10 minutes, would presumably serve to dazzle would-be predators and allow the vampire squid to disappear into the dark without the need to swim far.

Their aforementioned bioluminescent "fireworks" are combined with the writhing of glowing arms, along with erratic movements and escape trajectories, making it difficult for a predator to identify the squid itself among multiple sudden targets.

The vampire squid's retractile filaments have been suggested to play a larger role in predator avoidance via both detection and escape mechanisms.

[4] Despite these defence mechanisms, vampire squids have been found among the stomach contents of large deepwater fish, including giant grenadiers,[29] and deep-diving mammals, such as whales and sea lions.

As sedentary generalist feeders, they feed on detritus, including the remains of gelatinous zooplankton (such as salps, larvaceans, and medusae jellies) and complete crustaceans, such as copepods, ostracods, amphipods, and isopods,[24] as well as faecal pellets of other aquatic organisms that live above.

[9][30] Vampire squids also use a unique luring method where they purposefully agitate bioluminescent protists in the water as a way to attract larger prey for them to consume.

[31] If hypotheses may be drawn from knowledge of other deep-sea cephalopods, the vampire squid likely reproduces slowly by way of a small number of large eggs, or a K-selected strategy.

With iteroparity often seen in organisms with high adult survival rates, such as the vampire squid, many low-cost reproductive cycles would be expected for the species.

Hatchlings are about 8 mm in length and are well-developed miniatures of the adults, with some differences: they are transparent, their arms lack webbing, their eyes are smaller proportionally, and their velar filaments are not fully formed.

[40] Following an article in Rolling Stone magazine by Matt Taibbi[41] after the subprime mortgage crisis of 2008, the term "vampire squid" has been regularly used in popular culture to refer to Goldman Sachs, the American investment bank.