When animals live near family members, this creates potential for incest and inbreeding depression, especially with unfamiliar kin. We examined incest avoidance when birds paired in kin groups and after dispersal in western bluebirds, Sialia mexicana, a cooperative breeder with a persistent, but low frequency of adult males helping at the nest. During their first winter, sons usually live in family groups comprised of parents, brothers, immigrant females, and more rarely, immigrant males and philopatric sisters. Sons usually pair with females that have joined their winter group, although some pair with females they encounter after dispersal. Incestuous pairing among relatives with relatedness ≥0.25 rarely occurred in either context, even considering extrapair fertilizations and other sources of unfamiliar kin. Sons pairing in their winter groups preferentially mated with immigrant females and actively avoided pairing with relatives. After dispersal into kin neighborhoods in spring, active incest avoidance was still required to explain low levels of incest with females within 600 m (2–3 territories) of where sons first bred, whereas absence of incest over larger distances could be explained by random mating. The probability of encountering a female relative within 600 m of where a male settled declined rapidly with dispersal distance to near zero for males dispersing 2 km from home. Although recognition is required to avoid incest when pairing in winter groups or settling near home, female-biased dispersal reduces likelihood of incest to near zero, even when males disperse relatively short distances (e.g., 2 km) from where they were born.