The pygmy bluetongue lizard (Tiliqua adelaidensis) inhabits burrows originally dug by spiders in a few remaining fragments of native Australian grassland. These fragments are typically invaded by exotic plant species and subject to livestock grazing. We predicted that lizards prefer burrows in areas with reduced vegetation cover that will allow them to bask and see their invertebrate prey. We applied alternative grazing regimes to six experimental paddocks and found that sheep reduced vegetation density proportionally to the grazing intensity. Within each paddock, independent of the level of grazing, and in seven of the eight surveys, lizard burrows were in locations with lower vegetation density than random points However lizards moving between burrows in spring showed a tendency to choose burrows with relatively more surrounding vegetation. Our initial hypothesis that lizards would prefer burrows with an intermediate level of grazing that produced some reduction of vegetation cover was not completely supported, probably because lizards often choose burrows early in spring when grasslands have denser vegetation cover, and then tend to remain in the same burrow as grazing or seasonal drying reduces vegetation cover. Changes in vegetation do not seem to induce lizard movement.