Ecologists have long debated the relative importance of biotic interactions versus species-specific habitat preferences in shaping patterns of ecological dominance. In western North America, cycles of fire disturbance are marked by transitions between North American deermice (Peromyscus maniculatus), which predominate after wildfires, and southern red-backed voles (Myodes gapperi), which gradually replace deermice 3–4 years post-fire and maintain dominance as forests mature. While this shift has been frequently documented, the processes that mediate this turnover are debated. One possibility is competitive release, which predicts a reduction in vole competition may contribute to niche expansion and population growth in deermice. Alternatively, turnover in both species may be shaped by differences in their preferred habitat and resource base, as predicted by optimum foraging theory. We evaluate these hypotheses using stable isotopes and spatial mark-recapture of deermouse and vole populations sampled prior to and following a fire as part of a longitudinal study in the Greater Yellowstone Ecosystem. Fire disturbance was associated with a 94% decrease in vole abundance but a 102% increase in deermice. Even after accounting for microhabitat, vole and deermouse populations were negatively correlated spatially and temporally (R = −0.45), and competitor abundance was more important pre-fire than post-fire. When vole abundance was high (pre-fire), vole dietary niche space was 7x broader than that of deermice. Post-fire, deermouse dietary niche nearly tripled and was enriched in 13C (i.e., more C4 plants), while voles occupied a slightly reduced dietary niche (79% of pre-fire breadth). Our results suggest deermice are experiencing ecological release due to a reduction in vole competition but vole shifts are largely driven by habitat preferences.