Originally described as a subspecies of B. penicillata (Finlayson 1957), the Desert Bettong has only recently been recognized as a full species (McDowell et al. 2015). Finlayson (1958) provided a more detailed description of the skull and speculated that it represented a full species. However, Wakefield (1967) later synonymised anhydra with B. lesueur, based on his opinion that several features of the skull were similar to B. lesueur, although he noted that ‘the skull is very small’ (Wakefield 1967, p. 11). The Desert Bettong can be separated from the Woylie B. penicillata and the Boodie B. lesueur by several skull and dentition characters (McDowell 2013). Ancient DNA (aDNA) analysis of the Cytochrome b gene from the holotype shows it is a well-supported lineage, distinct enough from its closest relatives B. penicillata and B. lesueur to consider it a separate species (McDowell et al. 2015).

The Desert Bettong is known from a single modern specimen, collected in 1933 and has not been recorded alive since then, despite extensive surveys. The date of extinction is unknown, but was possibly in the 1950s or 1960s as Woylie Bettongia penicillata and Boodie B. lesueur survived in the Tanami Desert until c. 1960 (Burbidge et al. 1988).

The single modern specimen, a damaged skull, was collected in 1933 from a freshly-dead animal by the explorer Michael Terry near the McEwin Hills, east of Lake Mackay in the Tanami Desert, Northern Territory. Holocene material (a single maxilla) attributable to this species on morphological criteria is known from Stegamite Cave, southern Nullarbor Plain, Western Australia (McDowell et al. 2015). As these localities are widely separated, it may once have had a relatively wide distribution. Burbidge et al. (1988) did not record any Aboriginal oral history that may show indigenous knowledge of a third species of Bettongia in the central and western deserts; however, they did not ask people about a third species, as the Desert Bettong was not known to be a separate species at the time. If the Desert Bettong's pelage and behaviour was similar to the Boodie's, the two species may not have been differentiated.

It is not known how abundant the Desert Bettong was before its extinction. The species has not been recorded alive since 1933, despite extensive surveys.

Nothing is known about what habitat the Desert Bettong occurred in or about its ecology. The Tanami Desert is mostly a dry hummock grassland with scattered shrubs and this was possibly the habitat of this species. However, the subfossil record from the Nullarbor Plain Western Australian (McDowell 2013, McDowell et al. 2015) suggests a wider array of habitats. Interpretation of the skull and dentition of the Desert Bettong suggests that coarse browse material was a substantial proportion of its diet (McDowell et al. 2015).

The Desert Bettong was probably driven to extinction because of predation by introduced Red Foxes Vulpes vulpes and feral domestic Cats Felis catus, perhaps combined with changes in fire regimes.

There is strong evidence for decline and extinction of critical weight range mammals due to predation by Red Foxes; Short (1998) documented a close correlation between the extinction of bettongs in New South Wales and the arrival of the Red Fox.

There is strong evidence for decline and extinction of desert critical weight range mammals due to predation by feral domestic Cats; attempts to reintroduce Boodies B. lesueur to mainland areas where Red Foxes were controlled failed because of predation by feral cats (Christensen and Burrows 1994).

When Aboriginal people moved to settlements, fire regimes in the western deserts changed from mostly small fires resulting in a mosaic of fire ages to a regime of infrequent, very large summer fires (Latz 1995), with consequences for food availability and habitat suitability demonstrated for small desert macropods (Bolton and Latz 1978).

The species was not included in any State or Territory legislation and it is not known if it formerly occurred in any protected areas.