Demographic data are essential to determine the probability that species will persist over time. Unfortunately, demographic studies are rarely part of the initial evaluation of potentially threatened or endangered species. Here, we studied the population dynamics of a poorly known knob-scaled lizard species (Xenosaurus sp.) from México with the use of a population matrix modeling approach. We measured annual fecundity and survival over three consecutive years (2001–2004) and used these data to generate transition matrices. From these matrices we estimated annual variability in finite population growth rate (λ), stable stage structure, and the relative importance of the life-cycle components for λ (elasticity values). In 2 of the 3 yr population growth rates indicated a tendency toward population increase (λ_01–02  =  1.20 and λ_02–03  =  1.14), whereas in 1 of the 3 yr population growth rate indicated population decrease (λ_03–04  =  0.78). The negative population trend observed during 2003–2004 was explained by warmer and drier environmental conditions that caused the lowest observed survival rates in all size classes. We examined this annual demographic variability using stochastic simulations. This allowed us to project population trends under hypothetical scenarios with increasing frequency of unfavorable years, manifest through reduced survival, fecundity, or both. Our simulations revealed that small increases in the frequency of harsh annual conditions vastly increased extinction risk in this species. Given the highly restricted geographic distribution of this species and its susceptibility to extinction, we recommend that it be given a high priority for conservation.