Summary1. Although local variation in territorial predator density is often correlated with habitat quality, the causal mechanism underlying this frequently observed association is poorly understood and could stem from facultative adjustment in either group size or territory size. 2. To test between these alternative hypotheses, we used a novel statistical framework to construct a winter population-level utilization distribution for wolves (Canis lupus) in northern Ontario, which we then linked to a suite of environmental variables to determine factors influencing wolf space use. Next, we compared habitat quality metrics emerging from this analysis as well as an independent measure of prey abundance, with pack size and territory size to investigate which hypothesis was most supported by the data. 3. We show that wolf space use patterns were concentrated near deciduous, mixed deciduous/ coniferous and disturbed forest stands favoured by moose (Alces alces), the predominant prey species in the diet of wolves in northern Ontario, and in proximity to linear corridors, including shorelines and road networks remaining from commercial forestry activities. 4. We then demonstrate that landscape metrics of wolf habitat quality -projected wolf use, probability of moose occupancy and proportion of preferred land cover classes -were inversely related to territory size but unrelated to pack size. 5. These results suggest that wolves in boreal ecosystems alter territory size, but not pack size, in response to local variation in habitat quality. This could be an adaptive strategy to balance trade-offs between territorial defence costs and energetic gains due to resource acquisition. That pack size was not responsive to habitat quality suggests that variation in group size is influenced by other factors such as intraspecific competition between wolf packs.