The “Biophysical assessment for indemnity selection of federal lands in Colorado: Indemnity Unit locations” dataset delineates the spatial locations of 89 Indemnity Units, comprising 339 parcels of federal lands. These lands, currently managed by the Bureau of Land Management (BLM), are under consideration for transfer of ownership to the State of Colorado in compensation for federal lands not available for transfer at the time of statehood. The Indemnity Units total 23,130 acres of surface and mineral estate and 6,150 acres of mineral estate only. The specific land parcels to be transferred to the State will be finalized after an environmental analysis is completed, as required by the National Environmental Policy Act (NEPA). The additional geospatial dataset (“Soil salinity using electrical conductance”) and comma-separated values text files (“Land cover types,” “Terrestrial development,” and “Potential species of management concern”) can be joined with the Indemnity Unit locations (via the IU_Code) or used independently.