Wildlife communities are being altered by rapid environmental change including habitat loss and fragmentation, urbanization, and spread of invasive species. To predict consequences of these anthropogenic changes to landscapes, it is necessary to identify not only species that are negatively affected, but also species that are unaffected or even thrive. We used occupancy modeling to examine the spatial distribution of muskrats (Ondatra zibethicus) in riparian habitat within an agricultural region of east-central Illinois from 2007 to 2008. We examined whether site occupancy was related to local habitat conditions and anthropogenic landscape alterations including urbanization and dominance of invasive reed canary grass (Phalaris arundinacea). We sampled 90 study sites (200-m stream segments) for occupancy by muskrats based on presence of tracks, scat, and feeding sign. Per-survey detection probability was 0.79 (SE = 0.04) in 2007 and 0.76 (SE = 0.04) in 2008. Detection was related positively to Julian date and negatively to abundance of woody debris and emergent rocks. Site occupancy by muskrats was 0.59 (SE = 0.09) in 2007 and 0.69 (SE = 0.06) in 2008, a year with above-average precipitation. Occupancy was related positively to urban land cover surrounding sites, which could reflect higher baseflows and reduced risk from predation and trapping in urban areas. Occupancy was unrelated to site dominance by invasive reed canary grass, but muskrats occurred more often at larger, deeper streams and those with greater bank heights and less sandy bank soils. Turnover between years was driven by stream size and water availability. Muskrats exhibited tolerance to key aspects of environmental change, and muskrats might even be urban adapters when occupying riparian habitat that remains adequately connected in urbanizing landscapes.