With a length of just 0.4 millimetres, the fly, called Euryplatea nanaknihali, is five times smaller than a fruit fly and tinier than a grain of salt, the researchers said.
"It's so small you can barely see it with the naked eye on a microscope slide. It's smaller than a flake of pepper," said Brian Brown, of the Natural History Museum of Los Angeles County, who identified the fly as a new species.
"The housefly looks like a Godzilla fly beside it," Brown was quoted as saying by LiveScience.
One specimen of the fly, a female, was discovered by the Thailand Inventory Group for Entomological Research in Kaeng Krachan National Park.
It has smoky gray wings and has an egg-depositing organ that is pointed to make it easy to lay eggs inside another insect, as a parasitic fly would. While it's not the smallest insect (that title belongs a species of fairy wasp, coming in at 0.14 mm in length), it's the world's smallest fly ever found, the researchers said.
The fly comes from a group of 4,000 hump-backed flies called phorid flies.
One genus of the fly, Pseudacteon, is known for its anti-ant behaviours, which include decapitation.
They usually range from 0.04 inches to 0.12 inches in length, so they can only prey on larger ants. The flies lay their eggs in the body of the ant; the eggs develop and migrate to the ant's head where they feed on the huge muscles used to open and close the ant's mouthparts.
They eventually devour the ant's brain as well, causing it to wander aimlessly for two weeks. The head then falls off after the fly larva dissolve the membrane that keeps it attached. The fly then takes up residence in the decapitated ant head for another two weeks, before hatching out as a full-grown adult.
In this case, researchers think the fly parasitizes tiny acrobat ants, whose heads are about as large as the fly itself and grow to about four millimetres long.
They haven't been able to see this in action, but think it's likely in the newfound fly since the fly's closest relative decapitates ants in Equatorial Guinea.
The new findings are published in the journal Annals of the Entomological Society of America.