The Crest-tailed Mulgara is a mostly nocturnal marsupial, with a diet comprising a broad range of invertebrates and small vertebrates (Masters 2008). During the day it shelters in burrow systems, typically located at the base of grass clumps or bushes (Woolley 1990). It mostly occurs in sand dunes, with sparse vegetation (including the tall grass Zygochloa paradoxa), and in herblands and sparse grasslands bordering salt lakes (Masters 2008; Pavey et al. 2011). In an area of sympatry, the Brush-tailed Mulgara occupied sand plain and gibber plain, and the Crest-tailed Mulgara occupied sand ridges with tussock grasses (Woolley 2005; Pavey et al. 2011).

Reproduction is seasonal, with births in winter and early spring (Wood Jones 1949; Masters 2008). Sexual maturity is reached in the first year (Wood Jones 1949); generation length is taken here to be two years.

The Crest-tailed Mulgara has (or had) a wide distribution across central and inland Australia. However, precise circumscription of distribution is hampered by long-standing nomenclatural confusion (see Taxonomic notes), which renders many previous non-vouchered records ambiguous. As such, distribution maps are likely to be an imperfect representation, particularly of the former distribution. A current study by P. Woolley (pers. comm. 2014) seeks to review and re-attribute all museum records, and will substantial increase the reliability of such mapping.

Woolley (2006) noted that Wood Jones’ earlier (1923, 1949) records from Ooldea (on the eastern edge of the Nullarbor Plain) were attributable to this species, as were a series from the Canning Stock Route (Western Australia, 1930s), where it occurred sympatrically with D. blythi. There have been no recent confirmed records from Western Australia. The current range may be restricted to the Simpson Desert (Queensland, Northern Territory, South Australia), and the Tirari and Strzelecki Deserts of north-eastern South Australia and the western Lake Eyre region. Tracks of Dasycercus most probably attributable to D. cristicauda were recorded recently on the western and eastern side of Lake Eyre (Southgate 2006) extending to the southern edge of Anna Creek and Etadunna Stations or around 29^o S. Trapping in this region has confirmed the presence of the Crest-tailed Mulgara. Further sign was recorded near Goyder Channel between Lake Eyre North and Lake Eyre South (Southgate and Moseby 2011). No sign of Dasycercus was recorded at over 100 plots sampled further south (R. Southgate pers. comm. 2014).

In at least the north of South Australia the distribution of the species has increased substantially in association with decline in European Rabbit Oryctolagus cuniculus numbers due to the spread of rabbit calicivirus, which has evidently had the effect of reducing the abundance of Red Foxes and feral Cats (Pedler et al. 2016).

The Crest-tailed Mulgara is present in some conservation reserves, where it is protected from some threats.