In a replicated whole-lake experiment, we (a) tested for the existence of a flexible habitat shift in response to predator presence in age-0 rainbow trout (Oncorhynchus mykiss) at risk of cannibalism and (b) evaluated the population-level consequences of habitat shifts in terms of growth and survival over their first growing season. Daphnid food and adult trout predators were substantially more abundant in pelagic than in littoral habitats. Age-0 trout used all habitats in populations without adult trout predators, whereas age-0 trout were observed only in the less profitable littoral habitat in populations with adult trout. Consequently, mean fall mass of age-0 trout in the presence of predators was almost half that observed in populations without adult trout. Despite the shift in habitat use, age-0 trout experienced 90% mortality when adult trout predators were present, in comparison to only 36% mortality when absent. We conclude that the commonly observed habitat shifts by fish at risk of predation, observed at smaller scales, do in fact occur at the whole-system scale over long time intervals. These results suggest that fish are able to perceive risk at large spatial scales and thus take advantage of profitable (but normally risky) habitats when predators are absent, or move to less profitable refuge habitats when predators are present.