We examined the effects of predatory and competitive interactions among three owl species on reproductive success and population composition of these raptors both experimentally and observationally. Eagle Owls (Bubo bubo, body mas ≈ 2700 g), Ural Owls (Strix uralensis, 900 g), and Tengmalm's Owls (Aegolius funereus, 130 g) coexist in Fennoscandia and feed mainly on small rodents. Predation may play an important role in interactions among these owl species, because Eagle Owls and Ural Owls can kill Tengmalm's Owls but cannot enter the small entrance hole of Tengmalm's Owl nest boxes. We asked (i) whether predation risk and interspecific competition due to Eagle Owls and Ural Owls reduced breeding density and fitness of Tengmalm's Owls, and (ii) whether these interactions increased intraspecific competition for safe nesting sites among Tengmalm's Owls. We manipulated breeding densities of potentially competing owls by erecting nest boxes, the control being boxes in areas where breeding attempts of competing owl species were absent. Control nest boxes in areas with no Eagle Owl and Ural Owl territories, and nest boxes within Eagle Owl territories, were used by breeding Tengmalm's Owls more than nest boxes within Ural Owl territories. Most breeding attempts of Tengmalm's Owls near Ural Owls failed during the courtsip period. The observational data revealed that breeding frequency of Tengmalm's Owls was reduced and the mean start of egg laying was delayed by 11 d within 2 km of Ural Owl nest. In addition, male Tengmalm's Owl at these nests were younger and paired more often with short-winged (i.e., young and generally subdominant) females than when farther away from Ura Owl nests. Our results suggest that inexperienced male Tengmalm's Owls are forced to establish their territories in the vicinity of Ura Owls where they often paired with subdominant females. The areas near Ura Owl nests are suboptimal habitats for Tengmalm's Owls, whereas those near Eagle Owls are not. We conclude that predatory and competitive interactions from Ural Owls decrease the breeding population size of Tengmalm's Owls by reducing the suitable habitats. This is the first experimental demonstration that such interactions may decrease fitness of raptors.