Since pied flycatchers,Ficedula hypoleuca, breed at higher densities in deciduous forests than in coniferous forests, competition for territories is likely to be greater in the former, optimal habitat. I tested the hypotheses that males in a deciduous forest defend their newly established territories more intensely and have higher plasma levels of testosterone than males in a suboptimal coniferous forest. In the deciduous forest, breeding density was higher, egg laying started earlier and more fledglings were produced. Morphological characters such as wing length, plumage colour and the size of the white forehead patch did not differ consistently between males establishing territories in deciduous and coniferous forests. Before the nest-building period, males in the deciduous forest were heavier, and had significantly larger furcula fat depots. I tested territorial aggressiveness by exposing unmated territorial males to simulated territorial intrusions. A significantly higher proportion of territorial males in the deciduous forest physically attacked the intruder; those that did attack also attacked more frequently than did males in the coniferous forest. Furthermore, males in the deciduous forest stayed closer to the decoy, and were more restless during the simulated territorial intrusion. Males in the deciduous forest had higher plasma levels of testosterone and corticosterone than did males in the coniferous forest, but there was no difference in dihydrotestosterone levels. These hormonal differences are most likely to be the result of a higher intrusion rate and a higher population density in the deciduous forest. I conclude that prior ownership is a crucial factor in maintaining a territory, and that differences in aggressive motivation between unmated males in the deciduous and coniferous forests reflect the value of the nestboxes defended. The high testosterone levels observed in males from the deciduous forest are likely to be the physiological factor increasing their aggressive motivation and persistency.