We investigated the role of the western gray squirrel (Sciurus griseus) as a reservoir host of the Lyme disease spirochete Borrelia burgdorferi. A survey of 222 western gray squirrels in California showed an overall prevalence of B. burgdorferi infection of 30%, although at a county level, prevalence of infection ranged from 0% to 50% by polymerase chain reaction. Laboratory trials with wild-caught western gray squirrels indicated that squirrels were competent reservoir hosts of the Lyme disease bacterium and infected up to 86% of feeding Ixodes pacificus larvae. Infections were long-lasting (up to 14 months), which demonstrated that western gray squirrels can maintain B. burgdorferi trans-seasonally. Non-native eastern gray squirrels (Sciurus carolinensis) and fox squirrels (Sciurus niger) were infrequently infected with B. burgdorferi.