The known occurrences of Decastronema are randomly oriented filaments and filament fragments in shallow marine carbonates associated with marine calcareous algae and foraminifera, and commonly with the dasiclad Thaumatoporella (Barattolo & Bigozzi, 1996). The fossils are in fine-grained limestone, its grains ranging from micrite to microsparite. This lithology and association suggests that the sedimentary environment was entirely marine, but very shallow and at extremely low energy levels (De Castro, 1975). The variablility in abundance and the random orientation of the Decastronema fragments suggest that the fossils were transported prior to deposition, and so are very probably an allochthonous element in the thanatocoenosis in which they are usually found. In addition, the fossil was never seen in growth position. Even when densely packed, the broken filaments were deposited as randomly oriented clasts. The Mirdita population, for example, accumulated in lens-shaped depressions near the contact between overlying back reef lagoonal carbonates and paleokarstic bauxite.
The comparison with modern Scytonema supports a subaerial habitat for the fossil. Today, thick-layered sheaths are characteristic of subaerial species of Scytonema, whereas the sheaths of submersed species are thin (Bhâradwâja, 1934). So the habitat of Decastronema with its thick and divergent sheaths was probably subaerial.
Modern Scytonema, considered a likely counterpart of Decastronema, grows on intertidal flats. It forms extensive mats on the west coast of Andros Island, Bahamas, covering many square km around interspersed bushes of Rhizophora mangle (Fig. 9). Periodic storms often disrupt and displace these intertidal Scytonema mats and bury them in layers of fine-grade carbonate mud. Short cores taken from the mud flats (Fig. 9, inset) show dark layers of dislocated and randomly oriented Scytonema filaments between layers of carbonate mud with a few complete colonies preserved (R.N. Ginsburg, personal communication). However, disrupted and fragmented Scytonema filaments are also exported by tides and distributed over a much larger area where these fragments are buried in a shallow subtidal setting (Fig. 10). So we assume that the Cretaceous Decastronema lived in an intertidal habitat, similar to that on the west coast of the Andros Island (Fig. 11) but after death was transported to adjacent shallow areas of the carbonate platform where it was buried and fossilized.