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Nest predation is the principal cause of mortality for many grassland birds. Predation rates may be higher on prairie dog colonies because they may have less available nesting cover and may increase predator abundance. We compared 14-day nest predation rates for 1,764 artificial nests on 102 black-tailed prairie dog (Cynovnys ludovicianus) colonies and their paired off-colony sites (similar habitat lacking prairie dogs) from 14 May to 26 June 1998 in South Dakota and Wyoming. Predation rates on colonies (66.2 ± 2.2%; x ± SE) were 29.5% higher than at off-colony sites (51.1 ± 2.7%). Nesting cover on colonies was less dense and more uniform in structure and regression analysis showed differences in nest predation rates were correlated with estimates of mean nesting cover. Avian species associated with prairie dog colonies had smaller clutches and more broods/ year than species associated with off-colony sites, suggesting a mechanism that may help compensate for increased risk of nest failure. Factors that influence predator-prey dynamics (e.g., habitat fragmentation) or foraging success (e.g., insect availability) also may help explain higher risk of nest predation on prairie dog colonies. Our conclusions support others in recommending protection of large, intact prairie dog ecosystems.