Feeding raw peanuts to squirrels and other animals can have serious consequences. The results can even be fatal if peanuts compose a large and constant part of the diet.

Peanuts are a legume, not a true nut, and when raw they contain a trypsin inhibitor, a substance that inhibits or prevents the pancreas from producing trypsin which is an enzyme essential for the absorption of protein by the intestine. While the exact relationship between the trypsin inhibitor and malnutrition in rodents is not fully understood, the detrimental effects have been documented since 1917. Thus squirrels fed a steady diet of raw peanuts could easily develop severe malnutrition, and works such as The Backyard Naturalist by Craig Tufts specify the use of roasted peanuts.

According to the Washington State Cooperative Extension Service, roasting hulled raw peanuts for twenty to thirty minutes at 300 degrees Fahrenheit, stirring them frequently, will destroy the trypsin inhibitor and render the peanuts suitable for use as feed.

Similar cautions also apply to the use of sweet potatoes and to other raw legumes such as soybeans which are sometimes recommended as food for squirrels and which contain trypsin inhibitors.

Of course salted nuts of any kind should never be fed to wild creatures.

For further information consult sources such as Food Chemistry, edited by Owen R. Fennema or Animal Nutrition by Leonard A. Maynard et al.