Dating back to 255 Mya, a diversity of vertebrate species have excavated mysterious, deep helical burrows called Daimonelix (devil's corkscrews). The possible functions of such structures are manifold, but their paucity in extant animals has frustrated their adaptive explanation. We recently discovered the first helical reptile burrows, created by the monitor lizard Varanus panoptes. The plugged burrows terminated in nest chambers that were the deepest known of any vertebrate, and by far the deepest of any reptile (mean = 2.3 m, range = 1.0–3.6 m, N = 52). A significant positive relationship between soil moisture and nest depth persisted at depths > 1 m, suggesting that deep nesting in V. panoptes may be an evolutionary response to egg desiccation during the long (approximately 8 months) dry season incubation period. Alternatively, lizards may avoid shallower nesting because even slight daily temperature fluctuations are detrimental to developing embryos; our data show that this species may have the most stable incubation environment of any reptile and possibly any ectotherm. Soil‐filled burrows do not support the hypothesis generated for Daimonelix that the helix would provide more consistent temperature and humidity as a result of limited air circulation in dry palaeoclimates. We suggest that Daimonelix were used mainly for nesting or rearing young, because helical burrows of extant vertebrates are generally associated with a nest. The extraordinary nesting in this lizard reflects a system in which adaptive hypotheses for the function of fossil helical burrows can be readily tested.