The coyote, unlike almost every other known species, is capable of intraspecific breeding: it can mate with either the dog or the wolf and produce offspring that are not sterile. Behavioral differences between coyotes and wolves have probably been the sole barrier preventing one of these two species from being absorbed by the other eons ago. Observations of interactions between coyotes and wolves support the view that the two species are highly antagonistic. The solidarity of the pack and the hostility towards Canis latrans would indicate that it would be unlikely to either seek or to win a mate from the ranks of a wolf pack.
Coyotes do not readily mate with dogs for different reasons. The female coyote is highly selective in her choice of mate, for he plays a role in the rearing of the young. Nevertheless, dogs have been known to crossbreed spontaneously with wild coyotes in areas where Canis latrans is indigenous. However, without the help of a mate, the odds of her successfully raising pups would be greatly reduced.
Even if a litter of coy-dogs is successfully reared by the mother alone, these hybrids must later face still-greater obstacles when seeking mates for themselves. Coyotes, both male and female, can breed only in late winter. Male dogs, of course, are ready to mate throughout the year; thus, no barrier exists to a first-time coyote-dog match. But the offspring of such a union, the coy-dog, inherits an annual breeding pattern from it's wild parent with one hitch. Both male and female coy-dogs come into oestrus in the fall, three to four months earlier than do pureblood coyotes. Thus, they can never mate back to the wild side of their family, a fact that prevents mongrelization of the species Canis latrans.
The mongrel generation does, of course have the option of finding mates from among other coy-dogs or of pairing back to domestic dogs. But given the untimeliness of it's period of oestrus, any issue born to it must meet life during the harshest time of year, in midwinter, and the prospects of such an unfortunate litter surviving under wild conditions are poor indeed. To compound the handicap, studies show that coy-dog males take after the domestic-side of their family in that they do not assist in the rearing of the young. It is doubtful, therefore, that a coy-dog female can, by herself, find sufficient food during the winter months to nurse and feed a litter. For these reasons, it is unlikely that a race of wild coy-dogs has arisen or ever will arise to plague worried citizens who claim this has already happened.
Excerpt from Hope Rydens book God's Dog