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Livestock grazing is one of the primary uses of sagebrush rangelands in western North America; therefore, an understanding of the ecological implications of grazing on habitat quality for sagebrush-dependent wildlife is needed to help land managers balance multiple objectives for land use. We studied effects of cattle grazing on components of habitat for an uncommon sagebrush habitat specialist, the pygmy rabbit (Brachylagus idahoensis), which has been petitioned for endangered or threatened status in the USA. We evaluated multiple components of habitat before and after grazing in replicated control and treatment plots in a mesic, high-elevation sagebrush-steppe environment in south-western Montana, USA. We predicted that grazing would decrease the biomass of herbaceous forage, alter security cover, and increase rate of collapse of rabbit burrows, and we expected that these effects would be more pronounced during summer than spring. As expected, cattle grazing reduced the biomass of perennial grasses available to pygmy rabbits after grazing that occurred during either spring or summer, and the biomass of forbs after spring grazing. In contrast, grazing did not markedly influence the functional properties of vegetation related to predation risk or the integrity of rabbit burrow systems. In the context of the stocking rate of the allotments in our study (7.3 acres/Animal Unit Month, 2.95ha/Animal Unit Month), annual cattle grazing did not seem to markedly change habitat for pygmy rabbits in our study area; however, longer-term and higher intensity grazing might result in more pronounced habitat changes. Understanding the ecological implications of cattle grazing on habitat quality for pygmy rabbits and other sagebrush-dependent wildlife can guide conservation strategies for these species on sagebrush rangelands managed under multiple-use policies.