Disturbance events can alter habitat properties, leading to species displacement, isolation and/or local extinction. In addition, introduced species have been recognized as a threat to biodiversity of native species. Understanding the interacting impacts of fire on native and introduced wildlife species, and the influence on a native species of competition with an introduced species after ecosystem change is critical. Tree squirrels are indicators of forest health; we used two species to determine thresholds and assess behavioral responses to determine adaption to habitat alterations. We studied native Arizona gray squirrels (Sciurus arizonensis), which are believed to favor riparian habitat, and introduced Abert's squirrels (S. aberti), which prefer open parklike ponderosa pine (Pinus ponderosa) in the Santa Catalina Mountains, Arizona, USA. We examined how native but reportedly declining Arizona gray squirrels and introduced Abert's squirrels use areas within widespread fires that burned the study area in 2002-3. Fires burned in a mosaic pattern of unburned, low, moderate, and high burn severity patches. To determine how fire may affect squirrel habitat and behavior, we examined how fire altered habitat use and occupancy, and used distance sampling to determine squirrel abundance, distribution and use within a mosaic of burn severities. Occupancy and habitat use indicate that introduced Abert's squirrels are better adapted to post-fire conditions whereas native Arizona gray squirrels may be adversely impacted by fire disturbance. Our results suggest that Arizona gray squirrel populations may be locally imperiled due to post-fire habitat alteration and loss exacerbated by competition with Abert's squirrels. Abert's squirrels predominantly occupied unburned ponderosa pine and mixed conifer zones with open understories. In contrast, Arizona gray squirrels were documented at only four sites and primarily occupied unburned to low burn riparian areas with dense understories. Abert's squirrels predominately nest and feed in unburned coniferous areas whereas Arizona gray squirrels nest in unburned to low burn nonconiferous areas. Arizona gray squirrels have a reduced distribution and potentially in decline but only remain at lower elevations on the Santa Catalina Mountains. Fire management and restoration efforts should include examination of the differential impacts of fire on native and invasive species.