In common with many other previously widespread British birds, Yellow Wagtail Motacilla flava flavissima populations have declined substantially in the UK in recent decades. Recent national data suggest particular problems in grassland. We investigated how habitat management in a grassland area of East Anglia, England, influenced the habitat selection of this species. Breeding territories were associated with fields previously subject to prolonged winter floods and which contained shallow-edged ponds or wet ditches during summer. Territories were also associated with fields with short, sparse swards and high proportions of bare earth within the sward, and these features were themselves associated with previous winter flooding. However, nests were associated with taller swards than were random points within the same field, suggesting that Yellow Wagtails would benefit from within-field heterogeneity of sward height to provide both nesting and foraging habitat. We discuss how grazing, cutting and water-level management regimes could be used to promote optimal sward structure for Yellow Wagtails.