The impact of urbanisation is delayed for many species, as populations that manage to survive the initial loss of habitat gradually decline throughout the urban–bushland mosaic. Yet many species’ chances of persistence within urban areas can be increased through relatively simple management techniques, and an understanding of how remnant populations use the interface between urban and natural landscapes is therefore crucial to their long-term management. Here we examine the habitat preferences of a semi-urban population of long-nosed bandicoots (Perameles nasuta) that inhabits a matrix of urban open lawn and dense native heath macrohabitats. We radio-tracked animals in these two distinct macrohabitats and compared the microhabitat features between core and peripheral areas of home ranges. Core and peripheral areas did not differ in their characteristics for either macrohabitat; however, individuals showed a high level of fidelity to distinct foraging patches. We then related microhabitat features to an index of foraging activity using generalised linear modelling and found that diggings were more abundant in areas with moist, soft soils close to cover. Soil softness and moisture were experimentally increased via artificial watering on selected sites. After only 10 days there were significantly more diggings on watered than non-watered sites. Thus, bandicoots appear to be a matrix-sensitive species, using some open grass areas of the matrix but requiring the vegetation cover of remnant bush. We suggest, however, that artificial watering and additional cover may be one way to increase foraging opportunities to make this, and other semi-urban, populations matrix-occupying, and thus facilitate bandicoot persistence in the urban mosaic.