The mugger crocodile (Crocodylus palustris) is the only crocodilian species native to Iran. Its habitat is located in southern Sistan and Baluchestan Province, particularly within the Sarbaz and Bahu Kalat river basins. This study aimed to examine long-term land-use and land-cover changes and analyze the role of climatic factors in the transformation of the mugger crocodile’s habitat. Landsat satellite images from 1995, 2005, 2015, and 2025 were classified using field-derived training samples and the Random Forest algorithm. In addition, annual mean temperature and total annual precipitation data for 1995–2025 were extracted from the ERA5-Land reanalysis dataset, and their temporal trends were examined using linear regression and the Mann–Kendall test. The results showed that dense vegetation cover, which represents the crocodile’s primary habitat, followed a declining trend during the study period. In contrast, agricultural land expanded continuously, increasing from approximately 155 ha in 1995 to 2,394 ha in 2025. A substantial proportion of this expansion occurred near the Sarbaz River, indicating increasing human–crocodile conflict. The area of surface-water bodies decreased from approximately 385 ha in 1995 to 189 ha in 2015 but increased to 648 ha in 2025, coinciding with increased precipitation. Overall, agricultural land within the crocodile habitat and the protected buffer zone of the Sarbaz River expanded approximately fifteenfold. Given the resulting pressure on the crocodile’s habitat, the findings highlight the need for habitat-level management of human–crocodile interactions.