The simplest way of avoiding an ambush predator is to entirely avoid the habitat in which it hunts. However, this strategy requires that the prey species find alternative, risk-free sources of essential resources. Herein we describe a novel strategy used by agile wallabies (Macropus agilis) to avoid saltwater crocodile (Crocodylus porosus) predation: the creation of risk-free sites to obtain water. We studied the anti-predator behaviour of agile wallabies for 3 yr during the dry season along the Daly River, Northern Territory, Australia. Wallabies excavated holes in the sand 0.5–18.0 m from the water's edge, and preferred to drink from these holes over drinking from the river. We determined a hierarchy of preferred drinking-site options for the wallabies: non-river sites: springs, puddles, excavated holes; and river sites: sites with cover, shallow water sites and deep water sites. Drinking holes were twice as far from the water's edge in a river stretch with high crocodile density (2/km) than those in a stretch with low crocodile density (0.08/km). However, site differences could also be explained by river bank morphology. Collectively, our findings indicate that agile wallabies excavate drinking holes to avoid crocodile predation. We contend that this behaviour represents environmental manipulation specifically to alter the risk associated with obtaining a key resource.