Grassland managers often regard woody vegetation as hostile habitat that potentially reduces the abundance and fecundity of wildlife that use grasslands. We tested that assumption for waterfowl by examining patterns of nest success on study areas that differed in current extent and previous management of woody vegetation. We located and monitored 1,064 waterfowl nests on 33 federally owned Waterfowl Production Areas (WPAs) in western Minnesota during 2008–2010. Sites contained 0.3–15.1% woodland and also varied markedly in extent of shrubs and scattered trees. Average nest success was low (12.9%), but ranged from 1.5% to 38.7% among site-years. Nests were more likely to succeed when located in landscapes containing more grass (500-m scale) and fewer wetlands (100-m scale), but none of 8 variables measuring woody vegetation were negatively associated with nest survival and 1 variable (abundance of lone trees) was positively associated with nest survival. Our results indicate that management efforts focusing on removing woody vegetation are unlikely to provide improvements in nest survival rates for breeding waterfowl, except to the extent that such management is necessary to maintain large tracts of grassland. © 2012 The Wildlife Society.