We studied home range, habitat use, and vital rates of radio-marked Mexican spotted owls (Strix occidentalis lucida) in 2 study areas in the Sacramento Mountains, New Mexico. One study area (mesic) was dominated by mixed-conifer forest, the other (xeric) by ponderosa pine (Pinus ponderosa) forest and piñon (P. edulis)-juniper (Juniperus) woodland. Based on existing knowledge of relative use of forest types by Mexican spotted owls, we predicted that the mesic area would provide habitat of higher quality for spotted owls. Results generally supported this prediction. Median home-range size for owls in the mesic area was approximately half that of owls in the xeric area during both the breeding and non-breeding seasons (n = 6 owls in each area). Despite their reduced size, however, mesic-area home ranges contained twice as much mixed-conifer forest as xeric-area ranges. Owls roosted primarily (>80% of roosting locations in both seasons) in mixed-conifer forest in both study areas, and home-range size was inversely related to relative amount of mixed-conifer forest within the home range during both seasons. Both survival and fecundity rates were higher in the mesic than in the xeric area. Estimates of population trend based on observed vital rates suggested that the population in the mesic area was self-sustaining or nearly so during the period of study (1992 through 1994), but the population in the xeric area was not. Collectively, our findings suggest that habitat quality for spotted owls was higher in the mesic area than in the xeric area, and that the xeric area might function as an ecological sink. These results support the need for data linking demographic performance to habitat conditions in development of strategies for recovering threatened and endangered species.