1. Suppression of pest species via a native predator is a regulating ecosystem service that has the potential to limit crop damage and produce economic benefits. American kestrels (Falco sparverius) are widespread, highly-mobile, generalist predators that hunt in human-dominated habitats and potentially provide previously undocumented ecosystem services in agricultural landscapes. 2. We hypothesized that kestrel activity associated with nest boxes and artificial perches acts to increase perceived predation risk that, in combination with direct predation, can reduce fruit-eating bird abundances in orchards. We used counts and observations of fruit-eating birds from fixed-width transect surveys to investigate variation in bird abundances and to estimate sweet cherry loss in cherry orchards with and without active kestrel boxes. We also conducted a benefit-cost analysis of nest box installation and used regional economic modelling to estimate macroeconomic impacts of increased sweet cherry production in Michigan, an important US fruit-production region. 3. Fruit-eating bird counts were significantly lower at orchards with active kestrel boxes. Although kestrels used the perches in young orchard blocks and may benefit from them, the presence of perches did not have a significant effect on bird counts. 4. Benefit-cost ratios for kestrel nest boxes indicated that for every dollar spent on nest boxes, $84 to $357 of sweet cherries are saved from fruit-eating birds. Regional economic modelling predicted that increased sweet cherry production from reduced bird damage would result in 46 to 50 jobs created and $2.2 million to $2.4 million in increased income for the state of Michigan over a five-year period. 5. Synthesis and application. Kestrel nest boxes in sweet cherry orchards provide a highly cost-effective ecosystem service with potential reverberating benefits for a regional economy. Box occupancy rates will undoubtedly vary across landscapes and regions. However, costs to install and maintain boxes are small and, even if box occupancy rates are low, boxes can direct kestrel activity to particular places in agricultural landscapes where they can deter pest birds. Thus, the potential benefits in fruit crops greatly outweigh the costs of this pest management strategy.