Modification of landscapes due to energy development may alter both habitat use and vital rates of sensitive wildlife species. Greater sage-grouse (Centrocercus urophasianus) in the Powder River Basin (PRB) of Wyoming and Montana, USA, have experienced rapid, widespread changes to their habitat due to recent coal-bed natural gas (CBNG) development. We analyzed lek-count, habitat, and infrastructure data to assess how CBNG development and other landscape features influenced trends in the numbers of male sage-grouse observed and persistence of leks in the PRB. From 2001 to 2005, the number of males observed on leks in CBNG fields declined more rapidly than leks outside of CBNG. Of leks active in 1997 or later, only 38% of 26 leks in CBNG fields remained active by 2004–2005, compared to 84% of 250 leks outside CBNG fields. By 2005, leks in CBNG fields had 46% fewer males per active lek than leks outside of CBNG. Persistence of 110 leks was positively influenced by the proportion of sagebrush habitat within 6.4 km of the lek. After controlling for habitat, we found support for negative effects of CBNG development within 0.8 km and 3.2 km of the lek and for a time lag between CBNG development and lek disappearance. Current lease stipulations that prohibit development within 0.4 km of sage-grouse leks on federal lands are inadequate to ensure lek persistence and may result in impacts to breeding populations over larger areas. Seasonal restrictions on drilling and construction do not address impacts caused by loss of sagebrush and incursion of infrastructure that can affect populations over long periods of time. Regulatory agencies may need to increase spatial restrictions on development, industry may need to rapidly implement more effective mitigation measures, or both, to reduce impacts of CBNG development on sage-grouse populations in the PRB.