Mountain Plovers (Charadrius montanus) are grassland birds that often breed in close association with colonies of black‐tailed prairie dogs (Cynomys ludovicianus). However, not all colonies provide plover nesting habitat or habitat of equal quality, and the characteristics of colonies important for plovers remain poorly understood. Over two years, I used plover distribution surveys, territory mapping, and habitat sampling to study habitat use by plovers in prairie dog colonies in shortgrass prairie in northeastern New Mexico. My objective was to document important components of plover breeding habitat in colonies by comparing characteristics of used and unused habitats at three spatial scales: colony, territory, and nest‐site. I found evidence of plover breeding in 14 of 44 colonies in 2009 and 13 of 43 colonies in 2010. Based on logistic regression, the probability of a colony being occupied by plovers was positively associated with colony size, but negatively associated with mean vegetation height. Preference for larger colonies could relate to minimum habitat requirements, or a potential tendency of this species to nest in social clusters. Shorter vegetation height was strongly correlated with greater bare ground and lower forb/subshrub cover, all characteristics that may be related to plover predator avoidance and foraging microhabitat. At both the territory and nest‐site scale, areas used by plovers had shorter vegetation, more bare ground, and less forb/subshrub cover than unused areas. Nest sites were also more sloped, perhaps to reduce risk of flooding, and located further away from the nearest prairie dog burrow, perhaps to reduce risk of disturbance. Overall, my results show that plover use of prairie dog colonies was influenced by landscape and habitat features of colonies, and suggest that large colonies are particularly valuable because they are most likely to contain adequate areas with preferred habitat characteristics.