Populations of small mammals often fluctuate dramatically in arid environments, persisting at very low density during drought and erupting briefly but dramatically after rain. We selected 3 species that exhibit such boom and bust dynamics in spinifex grassland in the Simpson Desert, central Australia, and asked how they survive prolonged dry periods when they are scarce or absent from the trapping record. We postulated that animals persist by retreating to small patches of open woodland that are embedded within the grassland matrix and predicted that these patches would provide more food and shelter for small mammals than the surrounding grassland during dry periods but not at other times. We also predicted that capture rates and activity of the study species would be higher, and risk of predation lower, in the woodland than in the grassland during drought, and that after heavy rain the rate of return of small mammals to spinifex grassland would be correlated with proximity to patches of woodland. Sampling provided partial support for these predictions. Some food resources (seeds) were more abundant in woodland patches irrespective of environmental conditions, but others (invertebrates) showed no clear pattern; shelter resources were mostly invariant between habitats and times. Of the 3 study species, only the sandy inland mouse (Pseudomys hermannsburgensis) behaved largely as we had anticipated, but even this species was not confined to woodland during droughts. Both the spinifex hopping-mouse (Notomys alexis) and brush-tailed mulgara (Dasycercus blythi) continued to use grassland more than woodland during drought and nondrought periods, although N. alexis showed a tendency to increase its activity in woodland during dry conditions. Trappability remained relatively constant among species, habitats, and times, indicating that the temporal patterns of habitat use we uncovered were real and not artifacts of changes in animal behavior or susceptibility to capture. We conclude that woodland patches contribute importantly to the persistence of P. hermannsburgensis during droughts, whereas N. alexis and D. blythi either use other unidentified refugia at such times or occur at such low densities in grassland habitat that their chances of being captured are very small.