The role of competition in structuring biotic communities at fine spatial scales is well known from detailed process-based studies. Our understanding of competition's importance at broader scales is less resolved and mainly based on static species distribution maps. Here, we bridge this gap by examining the joint occupancy dynamics of an invading species (Barred Owl, Strix varia) and a resident species (Northern Spotted Owl, Strix occidentalis caurina) in a 1000-km study area over a 22-year period. Past studies of these competitors have focused on the dynamics of one species at a time, hindering efforts to parse out the roles of habitat and competition and to forecast the future of the resident species. In addition, while these studies accounted for the imperfect detection of the focal species, no multi-season analysis of these species has accounted for the imperfect detection of the secondary species, potentially biasing inference. We analyzed survey data using models that combine the general multistate-multi-season occupancy modeling framework with autologistic modeling, allowing us to account for important aspects of our study system. We found that local extinction probability increases for each species when the other is present; however, the effect of the invader on the resident is greater. Although the species prefer different habitats, these habitats are highly correlated at the patch scale, and the impacts of invader on the resident are greatest in patches that would otherwise be optimal. As a consequence, competition leads to a weaker relationship between habitat and Northern Spotted Owl occupancy. Colonization and extinction rates of the invader are closely related to neighborhood occupancy, and over the first half of the study the availability of colonists limited the rate of population growth. Competition is likely to exclude the resident species, both through its immediate effects on local extinction and by indirectly lowering colonization rates as Northern Spotted Owl occupancy declines. Our analysis suggests that dispersal limitation affects both the invasion dynamics and the scale at which the effects of competition are observed. We also provide predictions regarding the potential costs and benefits of managing Barred Owl populations at different target levels.