Although natal dispersal has received considerable attention from animal ecologists, the causes and consequences of breeding dispersal have remained largely unexplored. We used telemetry, direct observation, and long-term mark–recapture (9 yr) to study breeding dispersal in the North American red squirrel (Tamiasciurus hudsonicus) at Kluane, Yukon, Canada. We recorded the postbreeding behavior (keep the territory, share it with juveniles, or bequeath it to juveniles) of mothers from 485 litters, and monitored the fates of eight cohorts of weaned juveniles (680 individuals). The proportion of mothers that bequeathed their territory to one of their offspring was roughly one-third of that keeping or sharing it. Breeding dispersal was a recurrent phenomenon that characterized a fraction of the population of reproductive females every year. Dispersing females did not improve the quality of their breeding environment. In contrast, by leaving their territory, mothers allowed some offspring to stay on the natal site, which increased juvenile survival. Breeding dispersal by female red squirrels was thus a form of parental investment. Dispersing females were older than others, had higher numbers of juveniles at weaning, and moved their breeding sites more frequently after reproducing when food availability was high. These patterns are consistent with the major predictions of parental investment theories. We detected no difference in survivorship or future reproduction between dispersing and resident mothers. Juvenile males dispersed more often than females, but not farther. The sex of offspring did not influence whether mothers dispersed or not. Although we showed that breeding dispersal can have major impacts on the dynamics of squirrel populations, the relative implications of natal and breeding dispersal for the genetic structure and demography of populations and the social evolution of species remain unknown.