Beaver (Castor canadensis) populations have declined or failed to recover in heavily browsed environments. I suggest that intense browsing by livestock or ungulates can disrupt beaver-willow (Salix spp.) mutualisms that likely evolved under relatively low herbivory in a more predator-rich environment, and that this interaction may explain beaver and willow declines. Field experiments in Rocky Mountain National Park, Colorado, USA, found the interaction of beaver and elk (Cervus elaphus) herbivory suppressed compensatory growth in willow. Intense elk browsing of simulated beaver-cut willow produced plants which were small and hedged with a high percentage of dead stems, whereas protected plants were large and highly branched with a low percentage of dead stems. Evaluation of a winter food cache showed beaver had selected woody stems with a lower percentage of leaders browsed by elk. A lack of willow stems suitable as winter beaver food may cause beaver populations to decline, creating a negative feedback mechanism for beaver and willow. In contrast, if browsing by livestock or ungulates can be controlled, and beaver can disperse from a nearby source population, then beaver may build dams in marginal habitat which will benefit willow and cause a positive riparian response that restores proper function to degraded habitat. In a shrub-steppe riparian ecosystem of northwestern Colorado, USA, rest from overgrazing of livestock released herbaceous vegetation initiating restoration of a beaver-willow community. Thus, competition from livestock or ungulates can cause beaver and willow to decline and can prevent their restoration in heavily browsed riparian environments, but beaver and willow populations can recover under proper grazing management.