The bigfin reef squid is a neritic warm water-dwelling squid.[25] They are usually found 0 to 100 m (0 to 328 ft) below the water's surface.[23] They tend to remain close to the shoreline, near rocks and reefs.[31][32] They are slightly more active during the night and will move to deeper waters or find cover in daytime. Large numbers of juveniles can often be found hiding beneath floating driftwood.[11]
The bigfin reef squid is the most widespread species in the genus Sepioteuthis. It is found in temperate and tropical regions of the Indian Ocean and the western Pacific Ocean.[1][25] Their original range extends east to the Hawaiian Islands, west to the Red Sea, north to Japan, and south to Australia and New Zealand (42°N to 42°S and 32°E to 154°W).[1] The range has also expanded to include parts of the Mediterranean Sea. In 2002, bigfin reef squids were first documented in the Gulf of İskenderun of the southeastern Mediterranean Sea. They may have already existed in significant populations in the area as they have acquired a common name among the fishermen of the Aegean Sea – σουπιοκαλάμαρο (soupiocalamaro, literally "cuttlefish-like squid"). It is a Lessepsian migrant, reaching the Mediterranean Sea through the Suez Canal.[22]