He was originally nicknamed Chicko due to his reputation as a ladies man, or a "chicken chaser" in the popular slang of the day. A typesetter accidentally dropped the "k" in his name and it became Chico. It was still pronounced "Chick-o" although those who were unaware of its origin tended to pronounce it "Cheek-o". He used an Italian accent, developed off-stage to deal with neighbourhood toughs, for his on-stage character; stereotyped ethnic characters were common with Vaudeville comedians, and all the Marx brothers sometimes performed "dialect characters" early in their careers, but Chico was the only one to continue this into their films.

The obvious fact that he was not really Italian was referenced once on film, in their second feature, Animal Crackers. He recognizes someone he knows to be a shady character, impersonating a respected art collector:

Chico: "How did you get to be Roscoe W. Chandler?" Chandler: "How did you get to be Italian?" Chico: "Never mind that - whose confession is this?" Chico was a talented pianist. As a young boy, he would get jobs playing piano to earn money for the Marx family. Sometimes Chico would even get work playing in two places at the same time. He would acquire the job with his piano-playing skills, work for a few nights, and then substitute Harpo on one of the jobs. The two brothers looked so much alike, no one could tell the difference. Harpo however could only play a few tunes on the piano, which often would get both brothers fired.

Groucho Marx one time said that Chico never practiced the pieces he played. Before performances he would soak his fingers in hot water before going on instead. He was known for "shooting" the keys of the piano. As part of the act he would play passages with his thumb up and index finger straight - like a gun.

Chico became manager of the Marx Brothers after their mother, Minnie, died. As manager he cut a deal to get the Marx Brothers a percentage of a film's gross receipts - the first of its kind in Hollywood. Furthermore, it was his Hollywood connections that included Irving Thalberg who was convinced to sign the brothers on to MGM when the team was in a career slump after the failure of Duck Soup.

For a while in the 1930s and 1940s Chico led a big band; young Mel Torme began his professional career singing with the Chico Marx Orchestra.

Chico Marx was a compulsive womanizer, and had a lifelong gambling habit, which usually kept him short of funds, and which compelled him to continue in show business long after his brothers had retired in comfort from their Hollywood income.

(Groucho continued to host the long-running television show You Bet Your Life out of his love of being before an audience rather than any financial need.) The last two Marx brothers movies were made for Chico's benefit; the other brothers twice returned to the screen to bail Chico out of debt. Because of his gambling, the brothers finally took the money as he earned it and put him on an allowance, which he stayed on until he died. He had a reputation as a world-class pinochle player. It is said he would throw away good cards (with the knowledge of spectators) to make the play "more interesting".

He is buried in Forest Lawn Memorial Park Cemetery, in Glendale, California.