“What’s that in the World Tree?”
“It’s a bird!”
“It’s a dragon!”
“NO! It’s a SQUIRREL!”
– Some random collection of einherjar.
– Image at left from the Edda Oblongata, c.1680. Image at right created by Jack Peredur, 2022.
Ratatoskr, “the most celebrated squirrel in Norse mythology,”  is a minor player in the Great Game of the Norse Gods but likely a significant one. He dwells among the branches of the World Tree Yggdrasil, bears messages from one to another of the creatures dwelling in it, and alone of all creatures seems to have completely free run of it from top to bottom:
Ratatosk is the squirrel who there shall run
On the ash-tree Yggdrasil;
From above the words of the eagle he bears,
And tells them to Nithhogg beneath. 
Ratatosk(r) is translated as “rat-tooth,” “drill-tooth” or “bore-tooth” suggesting he not only runs up and down the Tree but also gnaws on it or drills into it. “Rata is actually related to Rati – the magical drill used by Odin in the Skáldskaparmál tale in Prose Edda by the Icelandic author Snorri Sturluson.”  This specialized “drill” is pictured in the Edda Oblongata, an Icelandic manuscript dated to 1680, as a horn protruding unicorn-style from the top or front of Ratatoskr’s head  as shown in the images above.
“From above the words of the eagle he bears…” This refers to the eagle who perches in the very top of Yggdrasil, presumably above even Asgard, and looking down sees everything that happens in all the Nine Worlds. Unfortunately, no surviving Norse manuscript reveals the eagle’s name. It (he? she?) apparently not only sees all, but “blabs all” as Reg Reynolds would say , and who better to listen than Ratatoskr?
“…And tells them to Nithhogg beneath.” Nithhogg(r) forms an opposite pole to the eagle: a dragon trapped by the great Tree’s roots in the snake-infested spring Hvergelmir, and constantly gnawing at them trying to escape . Ratatoskr’s main role is to carry messages back and forth between these beings. These messages seem most often to be insults . Given the habit of squirrels to give scolding calls when upset, “It takes little imagination for you to think that the squirrel is saying nasty things about you.” 
Ratatoskr can thus be considered at least a minor messenger of the Gods, a bushy-tailed counterpart to Mercury or Hermes . However, “Ratatoskr is regarded as a troublemaker. He enjoys fueling spiteful relationships, and he may sometimes add his own embellishments to the messages sent between the eagle and Nidhoggr the dragon.” 
Ratatoskr, despite his seemingly insignificant size and strength, may in fact be bringing closer the end of the world(s) by manipulating those others to damage the Tree which binds the Universe together. “Some say that Ratatoskr was a crafty squirrel who had secret intentions to destroy the tree of life but because he lacked the strength to do it himself, he manipulated Nidhoggr and eagle into attacking Yggdrasil.” 
Alternatively – and in my own opinion more likely – Ratatoskr may be a small but critical cog in the great machine in which, though individual worlds like individual lives indeed perish, they make way for new ones constantly being born. Regarding the rivalry of Eagle and Dragon, “the most common theory is that [Ratatoskr] spreads gossip, slander, and attempts to get the two fighting, which in turn is meant to continue the cycle of decay and rebirth of the tree.”  As their battle shakes the Tree worlds indeed may tumble like fruit from its branches, but new ones replace them in the endless cycle of Creation.
So the next time you see or hear a squirrel up in a tree, yelling insults and flipping its tail at you like a big fluffy middle finger, just grin back at it. It’s just playing a part in the Great Game of the Gods. And so are you.
 Grimnismal (“Words of Grimnis” (Odin)), Henry Adams Bellows translation (1936).
 The Prose Edda, Jesse Byock translation (2005). Penguin Classics. ISBN 0-14-044755-5