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Water Dragon Location. Water Dragon. The water dragon is a large species of lizard native to the forests and jungles of Asia and Australia. Water dragons are arboreal animals meaning that they spend most of their time in the trees, often close to a large body of water.
There are no other recognized subspecies of Chinese Water Dragon, but there are other similar lizard species, the closest genetic relative being the Australian Water Dragon (Physignathus lesueurii). The Chinese Water Dragon is also known by the names Asian, Green, and Thai Water Dragon.