Predation risk drives prey species behaviour, and risk-adverse behaviour (e.g. reduced activity) can be triggered by indirect indicators of predation risk such as moonlight illumination. Furthermore, the influence of moonlight on prey may depend on other factors that affect predation risk, such as vegetation cover. We used camera trap data from 154 sites in southwestern Victoria, Australia, to test the capacity of three hypotheses (predation risk, habitat-mediated predation risk and visual acuity) to explain the influence of moonlight and vegetation cover on the activity of seven small–medium sized (20 - 2500 grams) mammalian prey species and two introduced predators, red foxes (Vulpes vulpes) and feral cats (Felis catus). All prey species reduced their activity with increasing moonlight while only one species (the bush rat, Rattus fuscipes) reduced its activity in response to increasing moonlight more sharply in low compared to high vegetation cover. Neither predator species responded to moonlight. Our findings strongly support the predation risk hypothesis, provide limited support for the habitat mediated predation risk hypothesis, and do not support for the visual acuity hypothesis. For prey, the perceived costs of increased predation risk on moonlit nights outweighed any potential benefits of a brighter foraging environment.