Nest predation is the primary cause of nest failure in birds. Individuals should therefore adjust parental investment to minimize the costs associated with this constraint; evidence suggests that nest predation influences nest-site selection, and drives variation in both clutch size and parental behavior. Here, we test how the perception of the risk of nest predation from red squirrels (Tamiasciurus hudsonicus) influenced nest-site selection and reproductive investment of American Kestrels (Falco sparverius) breeding in the boreal forest. For this purpose, we conducted audio playbacks of squirrel vocalizations and altered nest boxes to experimentally increase cues of the presence of Red Squirrels in the vicinity of potential nests. Experimental manipulations of the risk of nest predation did not influence nest-site selection; however, experimentally increasing the perceived risk of nest predation induced kestrels to initiate breeding later, and to lay larger clutches. Parents did not appreciably alter incubation behavior in response to our manipulation, although the duration of incubation was longer where natural squirrel threat was higher. Our results showed that kestrels are capable of making facultative adjustments to current reproductive investment in response to their perception of the risk of nest predation.