There has been a significant decline in arboreal mammals in northern Australia, especially in the lower rainfall region of the tropical savannas. Currently, we lack a fundamental understanding of the habitat requirements of these species to prevent further declines. We investigated how variation in habitat structure influences den‐tree selection by an arboreal, hollow‐dwelling marsupial, the savanna glider (Petaurus ariel; Gould, 1842), in northern Australia from two populations at the climatic extremes of the species’ geographic range. We used traditional habitat surveys complemented by advanced terrestrial Light Detection And Ranging (LiDAR) technology to compare site habitat structure and subsequent den‐tree selection by P. ariel. Canopy height, total canopy cover and tree size were positively correlated with rainfall. At the higher rainfall site, P. ariel selected larger trees for denning than neighbouring trees; mean trunk diameter at breast height was 53.4 cm (95% CI: 49.6–56.8) and 33.8 cm (95% CI: 30.0–37.6), for den and neighbouring trees respectively. At the lower rainfall site, P. ariel den trees were no larger than neighbouring trees but were more likely to be Eucalyptus tectifica than any other available tree species. At both sites, P. ariel selected den trees that were more likely to be hollow bearing (through larger tree size or specific tree species). We found terrestrial LiDAR to be a useful tool for mapping fine‐scale variation in habitat structure which enabled us to account for variation in den‐tree selection between sites. However, we remained dependent on traditional habitat surveys to count hollows and identify tree species. With a better understanding of the relationship between tree size and den‐tree selection, future studies could use terrestrial LiDAR to map the probability of den‐tree availability for hollow‐dwelling species at a landscape scale. We emphasize the importance of protecting hollow‐bearing eucalypt trees for the conservation of arboreal mammals in northern Australia.