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Bird populations and forest vegetation were monitored before (1984-86), during (1987-88) and after (1989-96) a gypsy moth outbreak and subsequent defoliations at the Sleepy Creek Public Hunting and Fishing Area in Morgan and Berkeley Counties, West Virginia. The objective of this study was to examine how gypsy moth defoliation affected forest vegetation, and how changes in forest structure and composition affected bird populations and the nesting ecology of four bird species. Repeated defoliations killed many overstory trees (primarily oaks, Quercus spp.), opening the forest canopy and allowing vigorous growth of understory vegetation. Population numbers of many bird species that nested and/or foraged on or near the ground, or that used snags, increased significantly over the study period. Despite an approximate 40% reduction in large overstory trees after the outbreak, there were no widescale declines in birds that used the forest canopy. In the post-outbreak period, nest failure and rates of Brown-headed Cowbird (Molothrus ater) parasitism were not extremely high for four species examined, suggesting that gypsy moth defoliation does not cause a sink for nesting birds. In this study, gypsy moth defoliation resulted in a habitat mosaic that creates more habitat for understory and snag-using bird species, while residual overstory trees that survived defoliation provide habitat for stable populations of canopy-using species.