Animals almost always use habitats non-randomly, but the costs and benefits of using specific habitat types remain unknown for many types of organisms. In a large lake in northwestern Australia (Lake Argyle), most hatchling (&12-month-old) freshwater crocodiles (Crocodylus johnstoni) are found in floating vegetation mats or grassy banks rather than the more widely available open banks. Mean body sizes of young crocodiles did not differ among the three habitat types. We tested four potential explanations for non-random habitat selection: proximity to nesting sites, thermal conditions, food availability, and exposure to predation. The three alternative habitat types did not differ in proximity to nesting sites, or in thermal conditions. Habitats with higher food availability harboured more hatchlings, and feeding rates (obtained by stomach-flushing of recently-captured crocodiles) were highest in such areas. Predation risk may also differ among habitats: we were twice as likely to capture a crocodile after seeing it in open-bank sites than in the other two habitat types. Thus, habitat selection of hatchling crocodiles in this system may be driven both by prey availability and by predation risk.