Earlier today, my son told me about a creature he calls the ant-dolphin. It is a type of ant that feeds by transforming into a dolphin and eating fish. At night, it returns to ant form to sleep in an ant hill with the rest of the colony. I asked him if the ant changed into a regular-sized dolphin and he said yes.
I'm losing my current bout with insomnia, so stating it has proven difficult. However, as odd as it may sound, it seems to work in a way given the group survival instincts of both species.
I didn't ask whether or not the ants were normal-sized, but I'm going to go with a larger-sized ant, approximately half the size of a common dolphin.
I imagine either an island or a near-tropical oceanfront locale with twenty foot towers near the water's edge. The ants have tunnels underground inside their nest that lead to the water to ease transformation. In general, they are friendly to humans that live nearby, but prefer to interact with them in dolphin form instead of ant form.
Combine them with a city of merfolk and a local group of humans/good humanoids and you have two cultures bound together by their domesticated animals.
Hmmmm. Hopefully there will be more later on this.