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Territory quality shapes population dynamics and has conservation implications for territorial species. Yet, quantifying territory quality using different measures can yield conflicting results, particularly if territory selection is non-ideal, thus challenging the understanding of territory quality. We used a 25-year population study of spotted owls (Strix occidentalis) occupying 72 territories to evaluate five commonly used demographic- and occupancy-based measures of territory quality: occupancy rate, annual apparent survival rate, territory fitness, mean annual reproductive rate, and total reproductive output. To do so, we evaluated pairwise relationships between measures of territory quality and assessed the extent to which spotted owls selected territories based on their potential to promote fitness. Measures of territory quality were generally positively correlated. Notably, however, territory occupancy explained less than half of the variation (R2 = 0.37) in territory fitness (the expected fitness of territory holders). Non-ideal patterns in territory occupancy were the result of weak linkages between the likelihood of vacant territories becoming colonized and their fitness potential, particularly their capacity to promote reproduction. Imperfect territory colonization was likely the product of the spotted owl’s strong site fidelity to even low-fitness territories and constraints on the ability of dispersing individuals to locate high quality territories. Mismatches emerging from non-ideal colonization have important conservation implications because populations may benefit more from habitat restoration at low fitness-high occupancy territories and more from conspecific attraction measures at high fitness-low occupancy territories. Our findings for spotted owls were reasonably consistent with broad patterns observed for other species in previous studies, but the strength of associations between pairs of territory quality measures often varied considerably, suggesting that species-specific assessments of patterns in territory quality are important. Finally, when practical, examination of the ecological processes shaping multiple measures of territory quality will benefit the study and conservation of territorial species.