Meuschenia hippocrepis is found in the eastern Indian Ocean around the coastline of southern Western Australia to Victoria and Tasmania, and around the Houtman-Abrolhos-Archipel in wetsern Australia.
Meuschenia hippocrepis is typically found in large schools on offshore coastal reefs and deep, rocky estuary reefs in areas of kelp.
Juveniles use jetties and piers for shelter.
This species is found to a depth of 120 m.
Meuschenia hippocrepis also appears to be a relatively generalist feeder, it primarily targets sponge and algal species.