It was first recorded in the early 1840s and described by John Gould in London in 1843, on the basis of three specimens sent to him by George Grey, the governor of South Australia at the time.

Caloprymnus campestris was thought to occupy a relatively small area in South Australia, extending just over the borders of southwestern Queensland and Northern Territory.

Its native habitat was very arid; cover is sparse, and consists of saltbush and other chenopods and emu bush.

These nests were excavated or found and are crucial in the desert, where temperatures can be high, while relatively little brush or foliage is available for cover.

[1] Following the relief of drought conditions which improved the local habitat, the animal was rediscovered in 1931 when Hedley Finlayson found a thriving colony of them.

[8] Caloprymnus campestris was well-adapted to the extremely barren and arid regions it inhabited; these traits saved it from competition by introduced species like the European rabbit or domestic sheep.

Thus, the rapid decline of the desert rat-kangaroo began shortly after its recovery in 1931 correlates with the invasion of its habitat by the red fox.

[10] Predation by the red fox and feral cats,[1] as well as variable seasonal patterns and overhunting by indigenous Australians,[6] were blamed for the extinction of this species.

[10] In view of its amazing recovery following a 90-year period when it was not seen, the extinction of the desert rat-kangaroo is not certain; thus, sightings of this animal would not fall into the cryptozoology category.

Professor Ronald Nowak stated in his 2005 book, "perhaps a small population still survives, awaiting the time when it again may increase in response to proper conditions.

"[11] An animal was sighted in May 2011 off Peake Station and subsequently identified from a museum skin as a desert rat-kangaroo.

As such the sighting remains unconfirmed, but researchers Tony Robinson and Tiana Forrest confirmed the possibility "that a small population of Caloprymnus, generally considered to be extinct throughout its former range across the Lake Eyre Basin, may have been present in this area in May 2011".