Grassland bird populations are showing some of the greatest rates of decline of any North American birds, prompting measures to protect and improve important habitat. We assessed how vegetation structure and composition, habitat features often targeted for management, affected territory and nest site selection by Grasshopper Sparrows (Ammodramus savannarum ammolegus) in southeastern Arizona. To identify features important to males establishing territories, we compared vegetation characteristics of known territories and random samples on 2 sites over 5 years. We examined habitat selection patterns of females by comparing characteristics of nest sites with territories over 3 years. Males selected territories in areas of sparser vegetation structure and more tall shrubs (>2 m) than random plots on the site with low shrub densities. Males did not select territories based on the proportion of exotic grasses. Females generally located nest sites in areas with lower small shrub (1–2 m tall) densities than territories overall when possible and preferentially selected native grasses for nest construction. Whether habitat selection was apparent depended upon the range of vegetation structure that was available. We identified an upper threshold above which grass structure seemed to be too high and dense for Grasshopper Sparrows. Our results suggest that some management that reduces vegetative structure may benefit this species in desert grasslands at the nest and territory scale. However, we did not assess initial male habitat selection at a broader landscape scale where their selection patterns may be different and could be influenced by vegetation density and structure outside the range of values sampled in this study.