Most marsupials live in Australia and surrounding islands, but some are found in South America, and one, the Virginia opossum, lives in North America. Marsupials multiplied and evolved into all sorts of species in Australia because there were no placental mammals there to compete with them.ost marsupials live in Australia and surrounding islands, but some are found in South America, and one, the Virginia opossum, lives in North America. Marsupials multiplied and evolved into all sorts of species in Australia because there were no placental mammals there to compete with them.