The ability of predators to elicit a trophic cascade with positive impacts on primary productivity may depend on the complexity of the habitat where the players interact. In structurally-simple habitats, trophic interactions among predators, such as intraguild predation, can diminish the cascading effects of a predator community on herbivore suppression and plant biomass. However, complex habitats may provide a spatial refuge for predators from intraguild predation, enhance the collective ability of multiple predator species to limit herbivore populations, and thus increase the overall strength of a trophic cascade on plant productivity. Using the community of terrestrial arthropods inhabiting Atlantic coastal salt marshes, this study examined the impact of predation by an assemblage of predators containing Pardosa wolf spiders, Grammonota web-building spiders, and Tytthus mirid bugs on herbivore populations (Prokelisia planthoppers) and on the biomass of Spartina cordgrass in simple (thatch-free) and complex (thatch-rich) vegetation. We found that complex-structured habitats enhanced planthopper suppression by the predator assemblage because habitats with thatch provided a refuge for predators from intraguild predation including cannibalism. The ultimate result of reduced antagonistic interactions among predator species and increased prey suppression was enhanced conductance of predator effects through the food web to positively impact primary producers. Behavioral observations in the laboratory confirmed that intraguild predation occurred in the simple, thatch-free habitat, and that the encounter and capture rates of intraguild prey by intraguild predators was diminished in the presence of thatch. On the other hand, there was no effect of thatch on the encounter and capture rates of herbivores by predators. The differential impact of thatch on the susceptibility of intraguild and herbivorous prey resulted in enhanced top-down effects in the thatch-rich habitat. Therefore, changes in habitat complexity can enhance trophic cascades by predator communities and positively impact productivity by moderating negative interactions among predators.