Abstract The formation of an upper distributional range limit for species breeding along mountain slopes is often based on environmental gradients resulting in changing demographic rates towards high elevations. However, we still lack an empirical understanding of how the interplay of demographic parameters forms the upper range limit in highly mobile species. Here, we study apparent survival and within-study area dispersal over a 700 m elevational gradient in barn swallows (Hirundo rustica) by using 15 years of capture-mark-recapture data. Annual apparent survival of adult breeding birds decreased while breeding dispersal probability of adult females, but not males increased towards the upper range limit. Individuals at high elevations dispersed to farms situated at elevations lower than would be expected by random dispersal. These results suggest higher turn-over rates of breeding individuals at high elevations, an elevational increase in immigration and thus, within-population source-sink dynamics between low and high elevations. The formation of the upper range limit therefore is based on preference for low-elevation breeding sites and immigration to high elevations. Thus, shifts of the upper range limit are not only affected by changes in the quality of high-elevation habitats but also by factors affecting the number of immigrants produced at low elevations.