It is becoming increasingly clear that intraspecific evolutionary divergence influences the properties of populations, communities and ecosystems. The different ecological impacts of phenotypes and genotypes may alter selection on many species and promote a cascade of ecological and evolutionary change throughout the food web. Theory predicts that evolutionary interactions across trophic levels may contribute to hypothesized feedbacks between ecology and evolution. However, the importance of 'cascading evolutionary change' in a natural setting is unknown. In lakes in Connecticut, USA, variation in migratory behaviour and feeding morphology of a fish predator, the alewife (Alosa pseudoharengus), drives life-history evolution in a species of zooplankton prey (Daphnia ambigua). Here we evaluated the reciprocal impacts of Daphnia evolution on ecological processes in laboratory mesocosms. We show that life-history evolution in Daphnia facilitates divergence in rates of population growth, which in turn significantly alters consumer-resource dynamics and ecosystem function. These experimental results parallel trends observed in lakes. Such results argue that a cascade of evolutionary change, which has occurred over contemporary timescales, alters community and ecosystem processes.