Concern over the decline of grassland birds has spurred efforts to increase understanding of grassland bird–habitat relationships. Previous studies have suggested that black-tailed prairie dogs (Cynomys ludovicianus) provide important habitat for shortgrass prairie avifauna, such as mountain plover (Charadrius montanus) and western burrowing owl (Athene cunicularia hypugaea), although such studies are lacking in Colorado (USA). We used methods to estimate occupancy (ψ) of mountain plover and burrowing owl on prairie dog colonies and other shortgrass prairie habitats in eastern Colorado. Mountain plover occupancy was higher on prairie dog colonies (ψ = 0.50, 95% CI = 0.36–0.64) than on grassland (ψ = 0.07, 95% CI = 0.03–0.15) and dryland agriculture (ψ = 0.13, 95% CI = 0.07–0.23). Burrowing owl occupancy was higher on active prairie dog colonies (ψ = 0.80, 95% CI = 0.66–0.89) compared with inactive colonies (ψ = 0.23, 95% CI = 0.07–0.53), which in turn was much higher than on grassland (ψ = 0.01, 95% CI = 0.00–0.07) and dryland agriculture (ψ = 0.00, 95% CI = 0.00–0.00). Mountain plover occupancy also was positively correlated with increasing amounts of prairie dog colony in the landscape. Burrowing owl occupancy was negatively correlated with increasing amounts of prairie dog colony in the surrounding landscape. Our results suggest that actions to conserve mountain plovers and burrowing owls should incorporate land management to benefit prairie dogs. Because managing for specific colony attributes is difficult, alternative management that promotes heterogeneity may ensure that suitable habitat is available for the guild of grassland inhabitants.