Timber harvesting practises can lead to loss of suitable nesting opportunities and thus have a negative impact on reproductive success and abundance of arboreal species. For many species, the impact of forest operations and the effectiveness of mitigation, such as pre-operational surveys, retention of trees with nests or the use of nest boxes, are unknown. This study aimed to assess the impact of forest operations and the utility of nest boxes as a conservation tool, using the Eurasian red squirrel (Sciurus vulgaris) as study species. We carried out the first quantitative assessment of drey survey effectiveness and tested the predictions that (1) red squirrel drey use increases post-thinning (2) nest box use increases post-thinning when their availability may be critical; (3) nest box use increases over time due to habitation and (4) nest box characteristics and placement affect nest box use. Our results show that thinning has led to squirrels changing their nesting behaviour with increased drey use post forest operations. We conclude that drey surveys are inefficient due the dynamic nature of drey use by red squirrels and that although foresters can detect a small proportion of active dreys, it is impossible to assess whether dreys are in use. Furthermore, nest box use increased after forest operations and nest boxes placed at a lower position in the tree were preferred. Our results suggested that red squirrels habituate to nest boxes over time as nest box use was higher during the second year after deployment. Overall, we propose that nest boxes can be a useful conservation tool to mitigate the impacts of forest operations and conclude that early deployment of nest boxes can contribute to red squirrel conservation by providing shelter for red squirrels after forest operations – and potentially for juveniles during natal dispersal.