An ultimate benefit of marine protected areas (MPAs) is to reverse trophic cascades caused by human-driven collapse of critical ecological interactions. Here we demonstrate, that despite a small-scale (0.28 km²), and not being fully protected, a MPA with strict fishing management and habitat enhancement by artificial reefs (ARs) in southwest Japan can lead to well-established macroalgal communities on widespread sea urchin barrens through cascading effects of predator recovery. Areas with low urchin densities occurred in and around daytime lobster (Panulirus japonicus) shelters primarily formed by quarry-rock ARs inside the MPA. We confirmed in the laboratory that lobsters preyed on two dominant sea urchins (Echinometra sp. A and Heliocidaris crassispina), with size- and species-dependent predation. The area with few urchins extended farther (~65 m) from an AR with numerous lobsters than from a natural shelter (patch reef) with far fewer lobsters. Causation of this pattern was confirmed by a tethering experiment showing that predation on urchins was similarly high at and near lobster shelters but decreased at ~100 m from the AR to a similar level as at an unprotected site. Time-lapse photography revealed that predation on tethered urchins was due mostly to the largest size class of lobsters (> 100 mm carapace length), which comprised only 7% of the population, highlighting the importance of large-sized lobsters in controlling urchin abundance in localized areas adjacent to urchin-dominated barrens. Despite an ongoing once-a-year fishing event permitted within the MPA, lobster populations were persistent, demonstrating that the cascading effect of the lobsters on urchins and ultimately macroalgae was robust to temporary reductions in predator population size. Erect macroalgal cover was not simply accounted for by snapshot urchin density or biomass, suggesting a hysteresis effect of the phase shifts between macroalgal dominance and urchin barren states.