The number of red grouse (Lagopus lagopus scoticus) shot in the UK has declined by 50% during the 20th century. This decline has coincided with reductions in the area of suitable habitat and recoveries in the populations of some avian predators. Here we use long–term records of shooting bags and a large–scale manipulation of raptor density to disentangle the effects of habitat loss and raptor predation on grouse populations. The numbers of grouse harvested on the Eskdale half of Langholm Moor in southern Scotland declined significantly during 1913–1990 and grouse bags from the whole moor from 1950 to 1990 exhibited an almost identical but non–significant trend. Hen harriers (Circus cyaneus) and peregrine falcons (Falco peregrinus) were absent or bred at low densities on this moor throughout this period but heather–dominant vegetation declined by 48% between 1948 and 1988. Harrier and peregrine breeding numbers on Langholm Moor increased to high levels following protection in 1990 whilst grouse density and grouse bags declined year after year until shooting was abandoned in 1998. The prediction of a peak in grouse bags on Langholm Moor in 1996 based on the patterns of bags during 1950–1990 was supported by the observed peaks in 1997 on two nearby moors with few raptors which formerly cycled in synchrony with Langholm Moor. This study demonstrates that, whilst long–term declines in grouse bags were most probably due to habitat loss, high levels of raptor predation subsequently limited the grouse population and suppressed a cycle. This study thus offers support to theoretical models which predict that generalist predators may suppress cycles in prey populations.