He is first seen running from Mallow in the Mushroom Kingdom after stealing all his money. He also stole a citizen's wallet. Mario agrees to help Mallow get his money back. Together, they cornered Croco in Bandit's Way. He runs really fast to avoid them but eventually gets cornered near a bush and starts fighting Mario and Mallow. He was no match for Mario's fire attack, which lights his tail on fire, causing him to put it out and not attack. He was defeated, and Mallow got his money back. Plus, he dropped the citizen's wallet.
Later in the game, after Mario is knocked out from jumping on the spring in the Moleville cave hitting his head in the ceiling, Croco along with three bandits steal all his coins. Mario and company fight the bandits and eventually catch up with Croco. After he takes a few hits, he steals all of the party's items, but he gets defeated anyway.
He makes a few more appearances afterward. After you defeat Valentina in Nimbus Land, he is seen in the far right house. He gets scared off and drops a Signal Ring, which makes a sound if there is hidden treasure nearby if equipped. He also actually helps you in Bowser's Castle by selling some items, weapons, armor, and accessories. In the end, he is seen racing Yoshi in Yo'ster Isle. He throws a Yoshi cookie in an attempt to cheat and distract Yoshi, but Yoshi gets a speed boost from eating the cookie and beats him.
The way he behaves during his encounters is reminiscent of that of Robbin' Hood; with the first two having to fight him and the last one being more of an aid than a hazard.