The Mexican spotted owl (Strix occidentalis lucida) is a threatened species inhabiting canyons and forests in the southwestern United States and Mexico. It frequently occurs in older forests with high canopy cover and heavy fuel loads. Managers charged with integrating conservation of owl habitat with forest restoration activities need information on habitat use and population characteristics of Mexican spotted owls. Forest Service scientists studied Mexican spotted owl demography in the Sacramento Mountains in southcentral New Mexico from 2002 through 2011. This mountain range contains numerous owls as well as private lands embedded in contiguous mixed-conifer forest, which presents significant challenges in balancing conservation of owl habitat with reducing fire risk in the wildland-urban interface. Their study demonstrated that owls were increasing in abundance in the study area, and that most nests were located in wet mixed-conifer forests not greatly in need of restoration. This suggests that managers could focus treatments aimed at reducing fire risk outside of owl nesting habitat. They are also evaluating key assumptions and recommendations in the Recovery Plan for the Mexican Spotted Owl. They found a large majority of owl nest and roost locations in Protected Activity Centers (PACs) established 24 years ago under the recovery plan, suggesting that PACs in this area provide important habitat for owls. In addition, areas recently burned by wildfire provide valuable food resources to Mexican spotted owls. They observed two to six times greater prey biomass in burned wintering areas relative to paired nest core areas in the Sacramento Mountains. Owls show an affinity for nesting in cavities in large trees or snags, as well as in "witches' brooms" on trees infected with dwarf mistletoe. These research results will improve management of owl populations and habitats, and help mitigate conflicts with other management activities.