Primarily found in xeric situations, this species has been trapped in grassy areas, brush piles, and among jumbled rocks in a dry riverbed. It is also tolerant of man-made clearings. It is an accomplished predator, feeding primarily on invertebrates (Eisenberg and Redford 1999). Extensive work on colony animals has made M. domestica one of the best studied of the South American small opossums. In captivity this species breeds throughout the year, and some females produce four litters a year, some studies suggest up to six litters. The female builds a compact, complicated nest, carrying nesting material with her tail. Gestation lasts fourteen or fifteen days; young are born at about 0.10 g; litter size is three to fourteen, with an average of seven; and the oestrous cycle is twenty-eight days. Other studies give age of first reproduction is five to seven months, and a litter range from 6 to 11 with an average of 8.4. Young are attached to the nipple for about two weeks and then enter a nest phase. The female does not have a pouch but will transport young on her back. Young eat solid food at four to five weeks, can be separated from the females at seven weeks, and can reproduce at fifteen months. In captivity males often weigh considerably more than females.

This species is distributed in eastern and central Brazil, Bolivia, Paraguay, and north Argentina (Gardner 2008). The species is extremely abundant in the Chaco region of western Paraguay, but the records from Argentina are scarce.

The species occurs in a number of protected areas throughout its range.