Otocinclus caxarari is described from the Ji-Paraná (also known as the Machado) River basin in Rondônia, a state in the Brazilian Amazon known for high aquatic biodiversity and a large number of endemic loricariid species. The species name caxarari references the Caxarari indigenous people of the region. It is a small, slender Otocinclus with a brownish-grey body and a typically defined midlateral stripe.
The Ji-Paraná drains a region of ancient Precambrian rock, producing soft, slightly acidic water with low mineral content — conditions shared by many Rondônian endemic fish. O. caxarari inhabits shallow stream margins with moderate to gentle flow, foraging over algae-coated rocks and plant surfaces. The regional fish fauna is rich in loricariids, with which O. caxarari likely coexists in the wild.
In the aquarium, O. caxarari's preference for soft, warm, acidic water narrows its suitability somewhat compared to more generalist Otocinclus. It is best maintained in a biotope-style setup replicating Rondônian stream conditions, with soft water, driftwood, and a mixed community of South American nano fish. Supplemental feeding is essential, and group housing of six or more individuals reduces stress and promotes natural behaviour.