A new alvarezsaur, Albertonykus borealis, is described from the Lower Maastrichtian of the Horseshoe Canyon Formation, Alberta, Canada. Forelimb and hindlimb elements from at least two individuals were recovered from the Albertosaurus bonebed at Dry Island Provincial Park, along with pedal phalanges from nearby localities. Phylogenetic analysis shows that Albertonykus is the sister taxon of the Asian clade Mononykinae, consistent with the hypothesis that the alvarezsaurs originated in South America, and then dispersed to Asia via North America. The discovery of Albertonykus provides important insights into the biology of the Alvarezsauridae. As in other alvarezsaurs, the forelimbs of Albertonykus are specialized for digging, but they are too short to permit burrowing; they were most likely used to dig into insect nests. Potential prey items are evaluated in light of the fossil record of social insects. Ants were a minor part of the ecosystem during the Cretaceous, and mound-building termites do not appear until the Eocene. This leaves the possibility that Albertonykus preyed on wood-nesting termites. We tested this hypothesis by examining silicified wood from the Horseshoe Canyon Formation. It was found that this wood frequently contains borings, which resemble the galleries of dampwood termites (Termopsidae).