Habitat. Most kangaroos live on the continent of Australia, though each species has a different place it likes to call home. For example, the musky rat-kangaroo likes to nestle down in little nests on the floor of the rainforests in northeastern Queensland.ize. The largest kangaroo, as well as the largest marsupial, is the red kangaroo, according to National Geographic. The length from the red kangaroo's head to its rump is 3.25 to 5.25 feet (1 to 1.6 meters) long.