Specimens belonging to the genus were first discovered in a locality near Xinmin in Guizhou, China in 2002. At the same locality, which dates to 244 million years ago, other marine reptiles such as "Mixosaurus", "Keichousaurus", and "Wumengosaurus" have also been found. While the type specimen consisted only of a skull and the very front of the neck, additional specimens soon revealed the complete form of the body. Further discoveries of "Dinocephalosaurus" specimens were made in Luoping, Yunnan, China, starting in 2008. At this locality, "Dinocephalosaurus" would have lived alongside "Mixosaurus", "Dianopachysaurus", and "Sinosaurosphargis". One specimen discovered at the Luoping locality preserves a fetus within its abdomen, indicating that "Dinocephalosaurus" gave birth to live young like many other marine reptiles. "Dinocephalosaurus" is the only known member of the Archosauromorpha to give live birth, with the possible exception of the metriorhynchids, a group of marine crocodylomorphs.