Although cannibalism is ubiquitous in food webs and frequent in systems where a predator and its prey also share a common resource (intraguild predation, IGP), its impacts on species interactions and the dynamics and structure of communities are still poorly understood. In addition, the few existing studies on cannibalism have generally focused on cannibalism in the top-predator, ignoring that it is frequent at intermediate trophic levels. A set of structured models shows that cannibalism can completely alter the dynamics and structure of three-species IGP systems depending on the trophic position where cannibalism occurs. Contrary to the expectations of simple models, the IG predator can exploit the resources more efficiently when it is cannibalistic, enabling the predator to persist at lower resource densities than the IG prey. Cannibalism in the IG predator can also alter the effect of enrichment, preventing predator-mediated extinction of the IG prey at high productivities predicted by simple models. Cannibalism in the IG prey can reverse the effect of top-down cascades, leading to an increase in the resource with decreasing IG predator density. These predictions are consistent with current data. Overall, cannibalism promotes the coexistence of the IG predator and IG prey. These results indicate that including cannibalism in current models can overcome the discrepancy between theory and empirical data. Thus, we need to measure and account for cannibalistic interactions to reliably predict the structure and dynamics of communities.