Parks Canada spokeswoman Brianna Burley said it happened in the Skoki Valley area, near the Lake Louise ski hill, on Thursday.
A hiker was scrambling off the trail with his Jack Russell terrier when the adult grizzly approached and started stalking the pet.
"At first the hiker tried to stand his ground against the grizzly bear, and then came to a realization that the bear was intent on getting the dog," Burley said Friday.
The man tried to scare off the animal by yelling, throwing rocks and his backpack at it, but the grizzly wasn't backing off, Burley said.
"At this point he dropped the leash and the dog ran away about 20 feet at which point the bear chased the dog and that's where the bear overtook the dog."
The grizzly left the area, taking the dog's body.
The hiker, an employee of Skoki Lodge, was not hurt but was shaken.
"It was a very close encounter with a grizzly bear, and it's always hard to lose your pet, especially in a situation like that," Burley said.
At this time of year, Burley said bears are hungry and looking for food.
She said Parks Canada "strongly" recommends that people not bring their dogs hiking with them because it's not known how wildlife will react to the pets.
"When you encounter a grizzly bear, it's dynamic enough, but when you have a dog, it makes it more dynamic, you can never be 100 per cent certain how a grizzly bear will react to a dog.
"If a dog is barking or pulling on a leash, it can evoke a different kind of behaviour from a bear."
The area and trails have been shut down until further notice.
Guests at Skoki Lodge, a national historic site where cabins and the lodge have no running water or electricity and guests have to hike in 11 kilometres, were escorted out on Friday.
Employees will be flown out on Saturday, Burley said.
Also, four backcountry campgrounds in Skoki Valley are also off-limits — Merlin Meadows, Hidden Lake, Red Deer Lake and Baker Lake.
As for the bear, Burley said Parks Canada officials will monitor it but have no plans to do anything other than leave it alone for now.
She said there have been bear sightings in the area during the summer, but none in the last few weeks.
— By Mary Jo Laforest in Edmonton
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