Habitat augmentation on farms is predicted to conserve biological diversity and support beneficial animals that reduce crop pests. Effectiveness of local habitat enhancement and subsequent pest reduction services can be mediated by the amount of habitat at larger scales. We tested whether the presence and increase of local and landscape scale bird habitat increased avian predator abundance and pest reduction by birds. We surveyed birds and performed a sentinel prey exclosure experiment in walnut orchards in the Sacramento Valley, California, USA—comparing predation probability between orchards with (n = 10) and without (n = 10) woody habitat in uncultivated orchard margins. We digitized seminatural habitat cover in landscapes around orchards to test the effectiveness of avian predators in reducing sentinel prey along a seminatural cover gradient of 0–38%. Experimental prey were diapausing larvae of Cydia pomonella (L.) (Lepidoptera: Tortricidae; codling moth), a significant pest of walnuts, which overwinter in cocoons in orchards, emerge as adults, and produce larvae that feed on the nuts the following spring. Permitting bird access to cocoons increased larval predation from 11% (caged) to 46% (no cage), and predation increased with increasing proportions of seminatural habitat within 500‐m of orchard transects. Predation also increased as the size and bark furrow depth of walnut trees increased, likely because these characteristics were associated with increasing abundance of avian predators with functional traits specific to consuming tree‐dwelling cocoons (e.g., woodpeckers). The presence and increasing complexity of local margin habitat increased the species richness and abundance of avian predators but was not predictive of cocoon predation. Consistent with intermediate landscape‐complexity hypothesis predictions, the effect size of woodpecker abundance on predation was large in simple landscapes (1–20% seminatural cover) and low in complex landscapes (>20% cover). Contrary to predictions, effect size was large in cleared landscapes (<1% cover), suggesting that orchards supported predators in cleared landscapes, with positive effects on pest reduction. We provide evidence that increasing the abundance of avian predators with traits specific for consuming target pests—by retaining old trees and seminatural cover—can increase orchard pest reduction services in an intensive agricultural region.