Abstract Across many temperate coastlines worldwide, kelp habitat has degraded to be replaced by alternative reef‐states with consequences to ecosystem functioning. Identifying both causes of decline and mechanisms of resilience of remnant kelp habitat is critical for managing and restoring these ecosystems. We use a combination of aerial imagery and field experiments to reveal dynamics of kelp habitat fragmentation during phase‐shift from kelp Ecklonia radiata to overgrazed sea urchin barrens Heliocidaris erythrogramma in Port Phillip bay (Australia). Analysis of aerial images spanning 6 years (2009–2014) revealed fragmentation of kelp patches to result in increase in perimeter‐to‐area ratio during phase‐shift. Sea urchin foraging behaviour also changed from the edge to interior of kelp patches, with destructive grazing at the patch edge. Multiple modes of grazing were observed, with greatest rates of kelp bed decline occurring when urchins simultaneously grazed from the ‘outside‐in’ and ‘inside‐out’ of kelp patches. Overgrazing also triggered establishment of invasive kelp Undaria pinnatifida and proliferation of turf algae. Overgrazing reinforced native kelp decline, with overgrazing exacerbated by reduced provision of drift‐kelp. Synthesis and applications. Perimeter–area ratio of kelp patches can predict phase‐shift, with patch extinction occurring when ratios exceeded a critical ratio of ~0.7. Monitoring dynamics of this critical ratio using aerial imagery provides a novel and cost‐effective indicator of kelp ecosystem resilience for preventing further losses. Targeted culling/harvesting of overgrazing sea urchins along patch edges will enhance native kelp survival and decrease perimeter‐to‐area ratio of remnant kelp patches; reducing risk of phase‐shift to sediment‐trapping turfs and invasive kelp, dually promoting recovery of kelp ecosystems.
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