Predator populations are imperiled globally, due in part to changing habitat and trophic interactions. Theoretical and laboratory studies suggest that heterogeneous landscapes containing prey refuges acting as source habitats can benefit both predator and prey populations, although the importance of heterogeneity in natural systems is uncertain. Here, we tested the hypothesis that landscape heterogeneity mediates predator-prey interactions between the California spotted owl (Strix occidentalis occidentalis) – a mature forest species – and one of its principal prey, the dusky-footed woodrat (Neotoma fuscipes) – a younger forest species – to the benefit of both. We did so by combining estimates of woodrat density and survival from live-trapping and VHF tracking with direct observations of prey deliveries to dependent young by owls in both heterogeneous and homogeneous home ranges. Woodrat abundance was approximately 2.5x higher in owl home ranges (1,412 hectares) featuring greater heterogeneity in vegetation types (1,805.0 ± 50.2 SE) compared to those dominated by mature forest (727.3 ± 51.9 SE), in large part because of high densities in young forests appearing to act as sources promoting woodrat densities in nearby mature forests. Woodrat mortality rates were low across vegetation types and did not differ between heterogeneous and homogeneous home ranges, yet all observed predation by owls occurred within mature forests, suggesting young forests may act as woodrat refuges. Owls exhibited a type 1 functional response, consuming approximately 2.5x more woodrats in heterogeneous (31.1/month ± 5.2 SE) versus homogeneous (12.7/month ± 3.7 SE) home ranges. While consumption of smaller-bodied alternative prey partially compensated for lower woodrat consumption in homogeneous home ranges, owls nevertheless consumed 30% more biomass in heterogeneous home ranges – approximately equivalent to the energetic needs of producing one additional offspring. Thus, a mosaic of vegetation types including young forest patches increased woodrat abundance and availability that, in turn, provided energetic and potentially reproductive benefits to mature forest-associated spotted owls. More broadly, our findings provide strong empirical evidence that heterogeneous landscapes containing prey refuges can benefit both predator and prey populations. As anthropogenic activities continue to homogenize landscapes globally, promoting heterogeneous systems with prey refuges may benefit imperiled predators.