It inhabits open woodlands, thickets and wooded savannas, particularly where there are termitaria, rock outcroppings or crevices, or hollow logs and trees for use as dens (Hiscocks and Perrin 1991, Creel 2013, Hoffmann et al. 2014). Waser et al. (1995) noted that the most important determinant of Common Dwarf Mongoose habitat preference is the density of suitable dens, but this might not necessarily be the case (Hoffmann et al. 2014). It is not found in highly arid areas. It feeds mainly on arthropods, although it will prey on small vertebrates (Creel 2013).

This species is widely distributed from southern Somalia and Ethiopia south to northeast KwaZulu-Natal in South Africa and westwards to northern Namibia and southwest and central Angola and southeastern DR Congo (Creel 2013). It is usually found to elevations of around 2,000 m asl.

Dwarf Mongooses are present in several protected areas across their range, including Masai Mara National Reserve (Kenya), Tsavo East N. P. (Kenya), Serengeti N. P. (Tanzania), Hwange N. P. (Zimbabwe) and Kruger N. P. (South Africa). Since they attain high densities and have small territories (on average 0.25–0.35 km²; Rood 1983, Hoffmann et al. 2014), even small protected areas can harbour large populations (Creel 2013).