Coastal ecosystems provide numerous services, such as nutrient cycling, climate change amelioration, and habitat provision for commercially valuable organisms. Ecosystem functions and processes are modified by human activities locally and globally, with degradation of coastal ecosystems by development and climate change occurring at unprecedented rates. The demand for coastal defense strategies against storms and sea-level rise has increased with human population growth and development along coastlines world-wide, even while that population growth has reduced natural buffering of shorelines. Shoreline hardening, a common coastal defense strategy that includes the use of seawalls and bulkheads (vertical walls constructed of concrete, wood, vinyl, or steel), is resulting in a "coastal squeeze" on estuarine habitats. In contrast to hardening, living shorelines, which range from vegetation plantings to a combination of hard structures and plantings, can be deployed to restore or enhance multiple ecosystem services normally delivered by naturally vegetated shores. Although hundreds of living shoreline projects have been implemented in the United States alone, few studies have evaluated their effectiveness in sustaining or enhancing ecosystem services relative to naturally vegetated shorelines and hardened shorelines. We quantified the effectiveness of (1) sills with landward marsh (a type of living shoreline that combines marsh plantings with an offshore low-profile breakwater), (2) natural salt marsh shorelines (control marshes), and (3) unvegetated bulkheaded shores in providing habitat for fish and crustaceans (nekton). Sills supported higher abundances and species diversity of fishes than unvegetated habitat adjacent to bulkheads, and even control marshes. Sills also supported higher cover of filter-feeding bivalves (a food resource and refuge habitat for nekton) than bulkheads or control marshes. These ecosystem-service enhancements were detected on shores with sills three or more years after construction, but not before. Sills provide added structure and may provide better refuges from predation and greater opportunity to use available food resources for nekton than unvegetated bulkheaded shores or control marshes. Our study shows that unlike shoreline hardening, living shorelines can enhance some ecosystem services provided by marshes, such as provision of nursery habitat.