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Although seagrass meadows form a relatively homogenous habitat, escarpments, which form three‐dimensional structures and originate from the erosion of seagrass peat, can provide important habitat for reef fishes. Here, we compare fish assemblages and habitat structural complexity among seagrass Posidonia australis escarpments and canopies, as well as limestone reef habitats, to understand the role of seagrass escarpments as reef fish habitat in Shark Bay, Western Australia. The total number of fish species, fish biomass, and top predator biomass were significantly higher in seagrass escarpments and reef habitats than in seagrass canopies due to lower habitat structural complexity and thus becoming suitable habitats for predators and prey in the latter. Both seagrass escarpment and reef habitats host similar assemblages of top predators and carnivorous fishes, such as Epinephelus coioides, Microcanthus strigatus, and Choerodon schoenleinii, that were absent in seagrass canopies. Seagrass escarpments provide an alternative habitat for reef fishes comparable to rocky reefs, which are limited in Shark Bay. Caves and ledges within the escarpments support 13.4 Mg of fish and 3.6 Mg of top predator species of commercial interest within the Shark Bay World Heritage Site. Additional research is needed to further understand the ecological importance of seagrass escarpments in enhancing fish biomass and biodiversity, as reproduction grounds or refuge from predators, and to investigate the role of meadow edges in ecosystem function. [ABSTRACT FROM AUTHOR]