The yellow-nosed cotton rat is native to Mexico and to the states of Arizona, New Mexico, and Texas in the United States. Its range extends from the eastern side of the Sierra Madre Occidental to central Durango and western Coahuila in Mexico, and from Arizona to New Mexico and scattered desert ranges of the Mesa del Norte in trans-Pecos Texas in the United States. Its habitat is mountainous areas with grassy meadows, rocky slopes, shrubland, ponderosa pine, Douglas fir, and pinyon-juniper woodland. It is generally found on the lower, drier slopes at altitudes below . This species is the most xerophilous in its genus.