The idea of differences in individual quality has been put forward in numerous long-term studies in long-lived species to explain differences in lifetime production among individuals. Despite the important role of individual heterogeneity in vital rates in demography, population dynamics and life history theory, the idea of 'individual quality' is elusive. It is sometimes assumed to be a static or dynamic individual characteristic. When considered as a dynamic trait, it is sometimes assumed to vary deterministically or stochastically, or to be confounded with the characteristics of the habitat. We addressed heterogeneity in reproductive performance among individuals established in higher-quality habitat in a long-lived seabird species. We used approaches to statistical inference based on individual random effects permitting quantification of heterogeneity in populations and assessment of individual variation from the population mean. We found evidence of heterogeneity in breeding probability, not success probability. We assessed the influence of dispersal on individual reproductive potential. Dispersal is likely to be destabilizing in species with high site and mate fidelity. We detected heterogeneity after dispersal, not before. Individuals may perform well regardless of quality before destabilization, including those that recruited in higher-quality habitat by chance, but only higher-quality individuals may be able to overcome the consequences of dispersal. Importantly, results differed when accounting for individual heterogeneity (an increase in mean breeding probability when individuals dispersed), or not (a decrease in mean breeding probability). In the latter case, the decrease in mean breeding probability may result from a substantial decrease in breeding probability in a few individuals and a slight increase in others. In other words, the pattern observed at the population mean level may not reflect what happens in the majority of individuals.