Natal and breeding dispersal have a major impact on gene flow and population structure. We examined the consequences of natal dispersal on the reproductive success (proportion of pairs rearing chicks) of colonial-breeding Thick-billed murres (Uria lomvia). Reproductive success increased with distance dispersed for the first and second breeding attempt. The increase in breeding success leveled off at natal dispersal distances above 7 m. Our results were consistent with the idea that the relationship between dispersal and reproductive success is caused by site availability and mate choice as birds willing to disperse farther had a greater choice of potential sites and mates. This hypothesis was supported by the fact that birds dispersing farther were more likely to pair with an experienced breeder, which increases the likelihood of breeding success for young breeders. Explanations for increasing breeding success with increased dispersal based on inbreeding effects were unlikely because most breeding failures were caused by egg loss rather than infertility or nestling death. However, we could not explain why >50% of birds return within 3 m of the natal site, despite having an up to 50% lower reproductive success than birds dispersing 7 m or more.