The heat dissipation limit hypothesis suggests that the capacity for lactating mammals to transfer energy to their offspring through milk may be constrained by limits on heat dissipation, particularly in species that raise offspring in well-insulated nests. We tested a prediction of this hypothesis by evaluating whether lactating free-ranging red squirrels (Tamiasciurus hudsonicus) occupy less insulated nests when experiencing conditions that increase heat load. In support of the hypothesis, when climate normal ambient temperatures were warm, squirrels supporting large litter masses of furred offspring occupied nests of lower insulative value. These results support the heat dissipation limit hypothesis and suggest that free-ranging mammals may select nests based on their insulative value, not only to reduce heat loss in cold conditions but also to dissipate heat during periods of heat stress.