Glucocorticoid hormone profiles are increasingly used as physiological markers to infer the strength of species interactions that can influence fitness and ensuing population dynamics of animals. Here we investigated two aims. First, we measured the effect of a 90-min capture stress protocol on the plasma corticosterone responses of a large native Australian lizard, the lace monitor (Varanus varius). Second, we compared the basal and postcapture stress corticosterone responses of lace monitors in habitats where they were exposed to high or low densities of the European red fox (Vulpes vulpes), an introduced competitor. Lace monitors responded to the capture stress protocol by significantly increasing plasma levels of corticosterone above basal at 45- and 90-min-postcapture blood-sampling intervals. In habitats with high fox densities, lace monitors produced a significantly greater basal and capture-stress-induced corticosterone response compared to individuals in low-fox density habitat. A significant interaction among fox density, time postcapture, and body condition was also found to influence plasma corticosterone values. These results suggest competition with red fox, perhaps via nutritional stress and increased hypersensitivity of the adrenocortical axis in lizards. At present, without further research, we do not understand whether such responses mediate lizard fitness or whether they have adaptive or maladaptive consequences for lizard populations in response to red fox competition. Nevertheless, our results help broaden understanding of the physiological implications arising from species interactions and specifically how introduced competitors could mediate diverse impacts on native biodiversity.