Grassland bird species frequently respond to habitat characteristics at multiple spatial scales when selecting nest sites. The Western Burrowing Owl (Athene cunicularia hypugaea) is a grassland bird species of conservation concern across much of its range, but most studies of its habitat needs have been restricted to relatively small geographical areas and have not integrated multiple spatial scales. Our study examined habitat characteristics at three spatial scales—local (near the burrow), colony, and landscape—across western South Dakota. We searched for Burrowing Owls in 107 prairie dog colonies from May to August 2011. We located nest burrows in owl-occupied colonies, and we randomly selected non-nest burrows in colonies that were not occupied by owls for comparison. We collected data for local habitat variables in the field. Ground truthing and aerial imagery were used to calculate colony and landscape variables. We used logistic regression to identify variables that impacted nest site selection. Variables at multiple scales were important, with percent tree cover within 800 m of the burrow and visual obstruction at the burrow having the greatest effect on nest site selection. Burrowing Owls in western South Dakota were most likely to nest in landscapes with little tree cover, perhaps to avoid large avian predators associated with trees. At the local scale, Burrowing Owls were most likely to nest in regions of prairie dog colonies with relatively low visual obstruction. Burrowing Owls may benefit from prairie dogs maintaining vegetation at a short height, which allows the owls to easily detect prey and predators. Maintaining active prairie dog colonies in open landscapes across western South Dakota and preventing the establishment of trees near prairie dog colonies is necessary to ensure preferred breeding habitat remains for Burrowing Owls.