Livestock grazing in riparian habitats alters the vegetation structure, which has a detrimental effect on wildlife. This study examined the effect of cattle grazing in riparian habitats on winter bird biodiversity, small mammal biodiversity, and microclimate. Study sites were ungrazed, moderately grazed, and heavily grazed riparian habitats along the Oldman River, Alberta during winter 2005 and 2006. Bird species richness, individual abundance, and diversity indices were higher in ungrazed habitats than in grazed habitats. Deer mouse population sizes were not different except during spring 2006, when populations were larger in ungrazed sites. Microclimate data were collected in riparian sites and upland sites in winter 2006. Temperatures were higher and wind speeds were slower in riparian sites than in upland sites. Wind speeds were faster in heavily grazed riparian sites than in lightly grazed sites. Faster winds in heavily grazed sites may account for the decreased winter biodiversity in these habitats.