Any kind of scrap lumber is suitable to use in building a squirrel nesting box with the exception of exterior-grade plywood, which squirrels more easily destroy by gnawing on it. Unpainted, rough, weathered lumber is best.
Nesting boxes built of cedar or cypress last the longest, usually more than 10 years. One rough cedar board measuring 1 inch by 8 inch by 6 feet provides enough wood to construct an adequately sized squirrel nesting box. The box design is similar to that used for wood ducks, which also nest in trees. Tacking screen inside the box's front from the floor to the hole, especially if the wood is smooth, makes climbing out easier for the squirrels.