The Smalleye Pygmy Shark is a little-known species of dogfish shark in the family Dalatiidae, found in water 150–2,000 m (490–6,600 ft) deep near Japan, the Philippines, and Australia. There are bioluminescent photophores on its underside, which may serve to disguise its silhouette from predators. The International Union for Conservation of Nature (IUCN) has assessed it as Least Concern, citing its wide distribution and lack of threat from fisheries.
Among the smallest of extant sharks, the smalleye pygmy shark attains a maximum recorded length of 22 cm (8.7 in). It is shaped like a cigar and has a bulbous, pointed snout. The eyes are relatively small, with their diameters measuring 43–66% as long as the snout (compared to 61–82% in S. laticaudus). The eyes of this species also differ from S. laticaudus in that the upper rim of the eye socket is chevron-shaped rather than nearly straight. The nostrils lack substantially expanded skin flaps in front. The mouth is nearly transverse and bears thin lips; there are a pair of papillae (nipple-like structures) on the upper lip that are absent in S. laticaudus. There are 20–27 upper tooth rows and 18–23 lower tooth rows. The upper teeth are slender and upright. The larger, broader lower teeth have angled and knife-like cusps, and interlock to form a continuous cutting surface. The five pairs of gill slits are tiny and uniform.
The two Squaliolus species are the only sharks that have a spine on the first dorsal fin but not the second. The spine is usually exposed in males and covered by skin in females. The tiny first dorsal fin originates about over the rear tip of of the pectoral fin. The second dorsal fin is long and low, and originates over the front half of the pelvic fin bases. The pectoral fins are short with rounded margins, and the pelvic fins are long and low. The anal fin is absent. The caudal peduncle is thin and bears slight lateral keels. Males have shorter abdomens and longer caudal peduncles than females. The caudal fin is broad and triangular, with nearly symmetrical upper and lower lobes and a prominent notch in the trailing margin of the upper lobe. The dermal denticles are flattened and not toothed or elevated on stalks. This species is dark brown to black in color, becoming light towards the fin margins. Its underside is covered by light-producing photophores.
It inhabits the upper and middle layers of the water column near land, at depths of 150–2,000 m (490–6,600 ft). It conducts a diel vertical migration, spending the day in deeper water and rising to shallower waters at night.
It feeds primarily on midwater squid, krill, shrimps, and small bony fishes such as lanternfish.