Alien predators can have catastrophic effects on ecosystems and are thought to be much more harmful to biodiversity than their native counterparts. However, trophic cascade theory and the mesopredator release hypothesis predict that the removal of top predators will result in the reorganization of trophic webs and loss of biodiversity. Using field data collected throughout arid Australia, we provide evidence that removal of an alien top-predator, the dingo, has cascading effects through lower trophic levels. Dingo removal was linked to increased activity of herbivores and an invasive mesopredator, the red fox (Vulpes vulpes), and to the loss of grass cover and native species of small mammals. Using species distribution data, we predict that reintroducing or maintaining dingo populations would produce a net benefit for the conservation of threatened native mammals across greater than 2.42 x 10(6) km(2) of Australia. Our study provides evidence that an alien top predator can assume a keystone role and be beneficial for biodiversity conservation, and also that mammalian carnivores more generally can generate strong trophic cascades in terrestrial ecosystems.