C. lyra has been found in the northeast Pacific Ocean, off the coast of northern California at the Escanaba Ridge and the Monterey Canyon. It lives in soft abyssal sediment at depths between 3,316 and 3,399 m (10,879 and 11,152 ft) and attaches to the seafloor using its root-like rhizoid. They have been seen rooted on the sides of slopes and bottom of the Monterey Canyon, where its prey is funneled into the narrow crevasses the sponges inhabit. While it has only been observed off northern California, it likely has a much wider latitudinal range of 1,600 kilometres (990 mi) or more.