After a marked decline at the beginning of the 1900s, the arctic fox Alopex lagopus population in Fennoscandia has remained at a very low level. We suggest that the main cause for the population crash was winter starvation caused by (1) over-hunting of reindeer Rangifer tarandus populations, and thus reduced carcass availability in the mountains, and (2) increased interspecific competition for these carcasses because of increased invasion of red foxes Vulpes vulpes from lower altitudes. The failure of arctic fox populations to recover, despite increasing reindeer populations in the mid 1900s, can be explained by a concurrent strong increase in red fox numbers. Analyses of countywide hunting statistics from Norway 1891–1920 suggest that there actually was an increase in red fox numbers in the period of arctic fox decline, and that the increase in reindeer populations from the 1920s to the 1950s was accompanied by a new increase in red fox numbers. We conclude that restoring arctic fox populations most likely will require a substantial and lasting reduction of red fox populations.