The rhaphium pectinatum was last recorded in Britain 147 years ago in 1868 but was rediscovered in Old Sludge Beds on the outskirts of Exeter.
The fly is from the Dolichopidiae family, a group known as long-legged flies, and is usually found in tropical parts of the world.
Devon Fly Group member Rob Wolton said he was surprised by the find.
The last recorded sighting was on 19 July 1868 when the Victorian entomologist George Verrall caught a male and female at Richmond in south-west London.
Mr Wolton, who is also a member of Dipterists Forum, which specialises in the study of flies, said: "Imagine my surprise when I examined my catch that evening to find it included a fly that was presumed extinct in Britain.
"Nothing is known about its biology, but it seems that it may like brackish conditions like those found at the Old Sludge Beds."
The five hectare site is situated between the River Exe and the Exeter Canal and has been managed by Devon Wildlife Trust since 1979.
Steve Hussey from the trust said: "So often we have to break the news of species that are disappearing, so it's good to be able to announce the discovery of an animal that was thought to be extinct."
A fly thought to be extinct in the UK has been found in a Devon nature reserve.