Invasive plants represent a serious threat to native biodiversity worldwide through direct competition with native species and indirect effects resulting in ecosystem-level changes. In the western U.S., the sagebrush ecosystem has been seriously altered by the invasion of cheatgrass (Bromus tectorum), an exotic annual, and other species including smooth brome (B. inermis), an exotic perennial. We monitored 112 Brewer's Sparrow (Spizella breweri) nests (2006 and 2007) in Grand Teton National Park, Wyoming, to assess the potential effects of a smooth brome vs. native understory on nest survival in sagebrush steppe. Brewer's Sparrows settled earlier and clutch size was larger in native habitat, but indices of nest success were higher in the exotic habitat. Rates of failure and nest predation were higher in the native habitat. Using the logistic-exposure method, we compared estimates of survival in the two habitats. The model with the greatest support, according to AIC_c model-selection criteria, consisted of year and percent cover of smooth brome. Daily survival was higher in the exotic habitat in both years combined and in 2007 alone. The hot, dry conditions of both years may have contributed indirectly to the year effect by influencing the abundance and distribution of predator and prey. The observed increase in daily nest survival with increasing cover of smooth brome suggests that in this situation, Brewer's Sparrows benefited from the presence of smooth brome. The denser smooth brome may serve as a refugium for insects during hot, dry summers. Smooth brome may also increase nest concealment.