It is found in forest across a wide elevational range including lowland rainforest, hill forest, and both lower and upper montane forests, and also in secondary forests. There are no records from heavily disturbed or converted habitats, and possibly none from monoculture plantations such as oil palm. The species roosts in small groups in foliage, including dried bamboo, or in caves (though is not commonly encountered in this context).

Nyctophilus microtis is reported from numerous localities on the island of New Guinea—many in Papua New Guinea, but only one from Papua Province of Indonesia, and by single records each from Salawati Island to the west (Indonesia), New Britain and New Ireland (Papua New Guinea) to the east, and possibly from Sudest Island (Papua New Guinea) to the southeast (Flannery 1995a,b; Bonaccorso 1998). A recent acoustic record from Manus Island (Papua New Guinea) is likely to represent a member of this species complex (Armstrong et al. 2015) but this requires confirmation through capture. It is likely that the species occurs more widely in Papua Province, Indonesia, New Guinea. On the main island of New Guinea it ranges from sea level to 2,600 m Asl.

It has been recorded from Crater Wildlife Management Area and in or near to Variata National Park on the Sogeri Plateau. Once the taxonomic complexity within the group is resolved, the conservation status of the component species will need to be reassessed.