Water potential and temperature were monitored in 20 natural nests of tuatara, Sphenodon punctatus, through 12 months of incubation on Stephens Island, New Zealand. Tuatara nest in rookeries in open pasture, in sites that often are more than 100m from residential burrows located beneath the closed canopy of native bush. Nest tunnels are approximately 197 mm long, 73mm wide, and 45mm high, and have a slightly expanded chamber at the end. Eggs are generally deposited in 1-3 layers in the terminal chamber. The top eggs are 30-155mm below the soil surface, and an air space of as much as 20 mm may exist between the uppermost egg and the top of the chamber. Each nest receives an average of 8.6 eggs that imbibe water and swell during incubation. Only 48% of eggs have hatched or are still alive 12 months after oviposition. Survival by embryos is higher in moist nests than in dry ones. Variation in temperature in nests has only a small influence on survival, and this influence may be mediated indirectly by effects of temperature on the water exchanges experienced by incubating eggs. Water potentials in the soil of closed canopy forest on Stephens Island are high enough to support embryogenesis, but temperatures are too low. Thus, females leave the forest to nest in areas where soil temperatures are suitable for incubation.