 The South American water rat inhabits elevations from sea level to around 2,000 m, in areas from the northern coast of South America to Brazil, Argentina and the western slope of the Andes.Almost all of these mammals are found a small (2 m) distance from tropical forest streams and rivers.They tend to prefer the moist habitats in forested areas such as swamps or marshes, and are sometimes found inhabiting caves

The South American water rat has mainly one predator, the barn owl ("Tyto alba").