A hormonal‐challenge protocol was used to compare the stress response of males of Arctic ground squirrels and red squirrels during the breeding season (May). These squirrels live in the same boreal forest of the Yukon, but have very different life histories and utilize the forest in markedly different ways. Red squirrels had levels of total cortisol, maximum corticosteroid‐binding capacity, and free cortisol that were 5, 7, and 2 times, respectively, those of Arctic ground squirrels. Red squirrels were resistant to suppression by an artificial glucocorticoid, dexamethasone (DEX); Arctic ground squirrels were not. Cortisol levels in red squirrels responded slowly but continuously to the ACTH injection; Arctic ground squirrels responded rapidly and then stabilized. Testosterone levels in red squirrels were extremely sensitive to the challenge, being suppressed by both DEX and ACTH; levels in Arctic ground squirrels were resistant to the challenge, being modestly suppressed by DEX and stimulated by ACTH. Energy mobilization, as measured by glucose and free fatty acid responses, was not affected. Red squirrels had four times the levels of white blood cells and higher proportions of lymphocytes and lower proportions of eosinophils than Arctic ground squirrels, indicating that the latter were in worse condition immunologically. Our evidence suggests that the functions associated with the hypothalamic‐pituitary‐adrenal axis are compromised in breeding male Arctic ground squirrels, but not in red squirrels. We propose that in male red squirrels this axis has evolved in the context of a stable social system based on long‐lived animals with individual territories which are needed to deal with unpredictable winter food supplies. In contrast, Arctic ground squirrels escape the rigors of winter by hibernation and this hormonal axis has evolved in short‐lived males in the context of intense intra‐sexual competition in a social system based on female kin groups and regular male dispersal to avoid inbreeding. J. Exp. Zool. 286:390–404, 2000. © 2000 Wiley‐Liss, Inc.