Differences in habitat requirements and the spatial distribution of habitat for native and introduced species can determine outcomes of biological invasions. Introduced eastern gray squirrels (Sciurus carolinensis) have displaced native red squirrels (S. vulgaris) in Europe and have been implicated as a contributing factor to the decline of western gray squirrels (S. griseus) in North America. Eastern and western gray squirrels are associated with oak (Quercus spp.), but little is known about how these species interact. From April 2007 to April 2012, we radio-tracked sympatric eastern and western gray squirrels in western Washington to compare habitat use and evaluate competitive interactions. We developed resource utilization functions for each species and evaluated distribution of habitat on Joint Base Lewis-McChord, Washington, USA. Both species shared affinity for closed canopy forests and oaks; however, important differences in relationships with riparian areas and shrub cover resulted in low overlap in habitat distribution, which likely limited potential competitive interactions. Eastern gray squirrels appeared restricted to areas around wetlands likely because they supported the deciduous tree species that comprise habitat for this species in its native range. Use by western gray squirrels, but not eastern gray squirrels, significantly decreased with increasing shrub cover. Forestry practices that promote mixed oak-conifer with little shrub cover in uplands can benefit western gray squirrels and minimize interactions with eastern gray squirrels.