Accelerated extinction rates have prompted an increased focus on the interplay between environmental change and species response. The effects of environmental change on thermal opportunity are typically considered through a climate change context. However, habitat alteration can also have strong effects on the thermal environment. Additionally, habitat alteration is considered a leading factor of species extinction, yet few studies address the influence of habitat alteration on thermal opportunity and time-energy budgets in at-risk species. Here, we show the strong effects that habitat degradation can have on thermal opportunity, time-energy budgets, and life history demographics of local populations. In the Ozark Mountains of northern Arkansas, woody vegetation encroachment has resulted in a shift in life history traits that appears to play an important role in recent extirpations of eastern collared lizards (Crotaphytus collaris). Populations in degraded habitats experienced a decline in thermal opportunity and less time at body temperatures (time at T-b) suitable for digestion compared with those in intact habitats. We used our data to model the effect of reduced time at T-b on the net assimilated energy available for growth and reproduction. Our model predicts an similar to 46% decline in the annual fecundity of individuals, which is similar to empirical observations of reproduction of C. collaris populations in degraded habitats (similar to 49%). We conclude that C. collaris in degraded habitats experienced reduced growth and reproduction primarily as a result of constrained thermal opportunity leading to a decline in digestive processing rates. Our study applies an underappreciated approach to identify the biophysical and time-energy effects of habitat alteration.