We analyzed data on numbers and annual trends of breeding terns and gulls based on censuses of all colonies of the Caspian Tern (Sterna caspia), Forster’s Tern (S. forsteri) and California Gull (Larus californicus) in the San Francisco Bay estuary from 1982 to 2003. All species used nesting substrates that were flat, largely non-vegetated, had a wide view in all directions, and were composed of sand, gravel, or earth. The estuary supported 17, 13, and seven colonies of each species, respectively. Nesting terns were primarily on salt evaporation pond islands and tidal islands. The largest colony of California Gulls was on a deactivated salt pond. Total numbers of each species in 2003 were about 2,300, 2,450 and 21,200 breeding birds, respectively. Numbers of Forster’s Terns declined significantly during the study, while California Gulls increased, and the number of Caspian Terns was stable. Numbers of each species at each colony site have shown considerable annual variation. We attribute the lack of colony site fidelity of each species, and the decline among Forster’s Terns, primarily to mammalian predation, human disturbance, and possibly annual variation in food availability. Flat, minimally vegetated islands, which are few in the estuary, are critical for maintaining nesting terns and California Gulls. Yet, the planned restoration of 65% (9,050 ha) of the salt pond complex of the San Francisco Bay estuary will likely remove some of the salt pond islands and levees where 20% of the Caspian Terns (438 birds), 80% of Forster’s Terns (1,958) and 96% of California Gulls (20,210) were nesting in 2003. We recommend that restoration plans should include the creation of sizeable tracts of islands specifically designed to provide nesting habitat for these larids. These replacement sites should be in place soon after the restoration has been implemented; i.e., well before scheduled completion. This is especially important because severe habitat limitation would lead to competition for nesting space among the three species, a situation expected to result in exclusion of the terns by the gull, which nests earlier, are larger, more abundant, and more aggressive.