Killer fish are only found in water areas of Level 3, and are what prevents Rollie McFly from crossing the water swimming, forcing him to use the Water Taxi. They are actually a type of pond fish called the green sunfish and will often prey on small bugs and flies. In this case you are the bug, so watch out for these fierce predators. They stick around until the last part of the level when you reach the last Island and it is over populated with them then after that they are never seen again in that part of the level.
In the last part of the level you will have to jump on lilypads to avoid them to get to the last coin in the level.