Nests are important structures for the reproduction and survival of many organisms. We studied nest-site selection by the Mexican red-bellied squirrel (Sciurus aureogaster) in an oak–pine forest located south of Pátzcuaro, Michoacán, Mexico. We quantified 20 habitat characteristics and 6 nest characteristics for a total of 90 nest sites. Nest sites were compared with 90 random sites in parts of the forest where we always found nests (availability), and with 90 random sites in portions of the study area where we never located nests (unused sites). Nests were built in the tallest and largest trees and close to the main trunk. Unused sites are limiting the nesting capacity of squirrels apparently because these sites maintain a lower density of trees compared with nest sites. Two of the 6 characteristics quantified for nests were significantly associated with habitat characteristics where squirrels built nests. Quercus candicans was the tree species most widely used for nesting during the wet season, whereas Q. laurina was commonly used in the dry season, apparently in relation to the periods of mast production.