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A recent conceptual model of spatial organization in vertebrates, based upon changes in home range overlap with habitat quality, ‘the space-use model’, predicts large and strongly overlapping home ranges and absence of territorial behaviour in habitats with poor food availability. We investigated whether the model can be extended to predict intra-population variation in space-use in a habitat with strong temporal variation in resource abundance. We studied space use of Eurasian red squirrels (Sciurus vulgaris) in subalpine conifer forests over 4 years with strong fluctuations in seed production. Norway spruce dominated forests are resource limited habitats for squirrels, and tree seed availability is gradually depleted in the year following a poor seed-crop. Male and female squirrels responded to spruce seed-crop failure in 2000 by strongly increasing their home ranges and core-areas in the following year (mean MCP ± SE in summer and autumn, respectively: 2001, 122.9±14.1 ha and 84.3±9.4 ha, against 43.0±6.4 ha and 20.8±3.8 ha in 2002, and 22.7±1.5 ha and 21.4±2.0 ha in 2003). In 2001, half of the animals, those with the poorest quality pre-dispersal home ranges, emigrated to areas with more larch. Residents had multi-nuclear core-areas. Also, intra-sexual core-area overlap (males by males, females by females) was higher in 2001 and summer 2002, than in autumn 2002 and in 2003 (means ± SE in summer and autumn, respectively: males by males, 2001, 52±8 and 44±7%, 2002, 80±30 and 15±11%, 2003, 37±19 and 26±14%; females by females 2001, 52±10 and 112±32%, 2002, 55±27 and 0±0%, 2003, 12±8 and 0.1±0%). Red squirrels responded to food shortage by moving to patches with other food resources and abandoned the spacing pattern of reduced core-area overlap among males and nearly exclusive core-areas among females, found in less variable habitats. After richer seed-crops in 2001 and 2002, it took squirrels about a year to reduce the size of their home ranges and core-areas and return to a spacing pattern of stable home ranges and intra-sexual territoriality of adult females. These results are consistent with the space-use model and show that spacing behaviour in red squirrels is a plastic, conditional strategy with individuals adapting the size and/or location of their home ranges in relation to local distribution and abundance of food resources.