A pet toy with an adjustable treat dispensing lid has a lid or top that is connected to a body of the pet toy, and a treat holding enclosure receives treats. The enclosure has an open area which communicates with a treat dispensing opening of the lid enabling treats to be selectively dispensed. The lid may be placed at selected positions with respect to the body thereby changing the size of the exposed treat dispensing opening to thereby selectively change the rate at which treats are dispensed.