The microenvironment surrounding a lizard egg will strongly influence its probability of hatching, yet little is known about which environmental cues females use to select favorable nest sites. We conducted three experiments using Norops polylepis (Polychrotidae) in semi-natural enclosures to determine a female's ability to assess soil moisture levels and the presence of leaf-litter cover when selecting an oviposition site. Females laid significantly more eggs in moist soil (42% water content) than in the dry (10%) and saturated (70%) soil treatments. Most eggs (72%) placed in moist soil treatments hatched, whereas none of the eggs in the dry and saturated soil treatments hatched. In a separate choice experiment, females laid significantly more eggs in a “soil-and-leaf-cover” treatment than in “soil-only” or “leaf-cover-only” treatments. Our results demonstrate that female N. polyelpis can detect variations in water content and leaf cover, and that females prefer microhabitats that likely maximize the survival of their eggs.