The Mount Graham red squirrel (Tamiasciurus hudsonicus grahamensis) is constrained to the Pinaleño Mountains in southeastern Arizona, USA. The population's endangered status and extensive forest damage from insects and fire warrants a better understanding of habitat variables important for nest site selection. We examined characteristics of cavity (n = 91) and drey (n = 38) nests and compared these to random sites (n = 113). Dreys were found primarily in Engelmann spruce (Picea engelmannii) and corkbark fir (Abies lasiocarpa var. arizonica). Cavity nests occurred primarily in aspen (Populus tremuloides) and corkbark fir. Squirrels selected nest sites with higher canopy cover and more corkbark fir, decayed logs, and living trees. Forest management plans emphasizing thinning must consider how altering these habitat characteristics could affect availability and suitability of tree stands for nesting squirrels.