The Arsenal winger gave the ball away with his first involvement, but from then on everything he touched seemed to turn to goals as he wreaked havoc down the right flank.
With Gareth Barry and Frank Lampard dominating in midfield and Rooney linking play up between the midfield and Emile Heskey, England pinned Croatia back into their own half from the start.
After Heskey had a decent shout for a penalty waved away, Walcott put England in front with his first goal for his country.
There was a stroke of fortune about it as Danijel Pranjic's clearance cannoned straight into Robert Kovac and when the ball fell to Walcott inside the box on the right, he lashed it into the bottom corner.
A minute later Walcott's cross-shot from a similar position was touched behind by keeper Stipe Pletikosa, before Josip Simunic was booked for a cynical foul as Walcott's pace terrorised Croatia once more.
The only disappointment for England was a head injury to Joe Cole
Eight minutes after the break Croatia suffered a hammer blow when Robert Kovac went up for a challenge with Joe Cole and appeared to lead with his elbow, causing the Chelsea midfielder to bleed from a wound on his head.
Kovac was rightly sent off and Cole had to be stretchered off, but six minutes later England went 2-0 ahead when the sublime Rooney - enjoying a glorious return to form wearing the three lions - beautifully teed up Walcott to smash in his second.
England were rampant, and Jermaine Jenas scampered away down the left and pulled the ball back for Rooney to open up his body and direct the ball into the corner.
It was like watching England at their Euro 96 best as they passed the ball around with devastating accuracy and Lampard was cruelly denied a goal after another gorgeous team move when his goal was ruled out for a foul committed by Heskey.
Croatia were all over the place, but they managed a consolation when Darijo Srna broke and he fed Mandzukic to drive the ball under David James.
It's all smiles in the dressing room - Walcott
England were not done, though, and Rooney turned provider once more to slip Walcott in on goal, the former Southampton star racing through and keeping his head to slot under Pletikosa to complete his treble.
In doing so he became the youngest player to score a hat-trick for England, and the first in a competitive game for England since Michael Owen bagged three against Germany in the 5-1 win in Munich in 2001.
Capello's men can be every bit as pleased with this result in the cauldron of the Maksimir Stadium.
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