A suite of dryland mammals rely on refuges for long-term persistence during alternating cycles of low and high resource availability. Refuges are small, discrete areas into which populations contract during the lengthy dry periods that characterize dryland environments. Little is known about the characteristics of a location that make it functional as a refuge. Similarly, no information exists on how grazing-facilitated landscape modification affects small mammal refuges. To examine these questions, we assessed diet at refuge sites across the low phase (“bust”) of the population cycle of the plains mouse (Pseudomys australis), a threatened, refuge-using rodent coexisting with extensive cattle production in Australia's drylands. The species has a varied diet dominated by species of grasses and forbs (mostly seeds) with a small proportion of invertebrates. Most of the plants consumed are shallow-rooted and short-lived species that should germinate in response to small rainfall events. Coexistence with cattle production is likely to be possible because grazing-tolerant plants are a dominant component of the diet. Our findings provide a plausible explanation for the persistence of P. australis with cattle production in dryland Australia, which should be further investigated to develop management strategies that will enable continued coexistence. This investigation should be extended to consider other refuge-using species of small mammal in pastoral systems.