Release from interspecific competition can lead to niche shifts and have positive fitness consequences. I studied two closely-related and ecologically similar Empidonax species that breed across an elevational gradient in the southern Sierra Nevada: the Dusky Flycatcher (Emidonax oberholserii) and the Hammond’s Flycatcher (E. hammondii). Both species coexist at low and moderate elevations but only Dusky Flycatchers occur in high elevation forests where they are abundant. My objective was to examine niche shifts and possible fitness consequences in Dusky Flycatchers breeding where their potential competitors are absent. Hammond’s Flycatchers nested exclusively in trees while Dusky Flycatchers generally nested in shrubs at low and moderate elevations, but at high elevations they switched their nest location to that of Hammond’s Flycatchers. This suggests ecological release, where Dusky Flycatchers shift to the nesting niche of Hammond’s Flycatchers where they are absent. Nest survival for both Hammond’s and Dusky flycatchers increased with nest height, suggesting that nesting in trees is beneficial for both species. The advantages to nesting at higher elevations are likely complex and not solely related to changes in nest location and elevation. Studying species that segregate along environmental gradients may help us understand and better predict species’ responses to climate change.