This species forages in and above the rainforest canopy and other open habitats. (Flannery 1995, Bonaccorso 1998). It is assumed to roost in large tree hollows, similar to that used by Chaerephon jobensis.

This species has only been recorded in Papua New Guinea, and from only two locations: Valilala River, near Kerema in Gulf Province (one specimen collected; holotype); and Mai-u River, near Mount Suckling, Oro Province (ten specimens collected) (Flannery 1995, Bonaccorso 1998). It has been recorded from sea level to 300 m asl.
More recent unconfirmed records of an Otomops species have come from echolocation call recordings made as part of several biodiversity surveys in Hela, Gulf, Southern Highlands, Western and Madang provinces (K.N. Armstrong unpublished data), suggesting a relatively wide distribution up to mid-elevations. None of these recordings is associated with a captured specimen. It is possible that only calls recorded on the southern side of the central cordillera are from O. papuensis.

Given the species association with primary and secondary forests, it is assumed that forest degradation and loss for agriculture and plantations is a threat to the species.