Krypto was an alien creature used as a pet by Bizarro.
Krypto was a vicious, olive-colored, lizard-like alien which presumably was the last of its species, as it had been captured by the Preserver and imprisoned on its ship. After Superman defeated The Preserver, he took possession of all the villain's endangered species and placed them in more humane surroundings in a zoo inside his Fortress of Solitude, to include the reptilian alien.
When Bizarro infiltrated the Fortress of Solitude, his awkward manner suggested he had found The Preserver's ship, as he surmised the animals were being cruelly kept against their will, or akin to a prison as Bizarro releases them while saying "you do nothing wrong". The lizard alien seemed to be grateful to Bizarro for this, forming an attachment to him like some animals do to people. Considering it a pet from his "lost world", Bizarro christened the creature "Krypto". When Superman presented Bizarro with his own planet, he also let Bizarro keep "Krypto" in order to help him settle on this new world.
Although a dangerous creature, Bizarro seems to have been somewhat successful at domesticating it. However, it only seems to obey Bizarro, as it was later seen harassing Mr. Mxyzptlk, to the annoying jokester's displeasure.