The Sierra Madre sparrow Xenospiza baileyi, categorized as Endangered on the IUCN Red List, is endemic to Mexico. The subalpine bunch grasslands of the Transverse Volcanic Belt in the south of the Valley of Mexico are the last remaining habitat of this species. We conducted a detailed survey for the Sierra Madre sparrow using the point count method, and then described the speciesʼ habitat using a phytosociological approach. The two sets of information were pooled into a single analytical framework to identify priority habitats for the species. Eight vegetation communities were distinguished. The Festuca lugens-Muhlenbergia quadridentata and Stipa ichu bunch grassland communities had the highest densities of the Sierra Madre sparrow. Intensive burning and grazing activities and agricultural encroachment have restricted sparrow occupancy. Landscape analysis helped to delineate core grassland areas for the species and grassland strips and islands that could potentially act as habitat corridors. From the information generated in this study, which was shared with the local communities, we are establishing a participatory socio-ecological investigation for conservation of the Sierra Madre sparrowʼs habitat.