The importance of positive interactions is increasingly acknowledged in contemporary ecology. Most research has focused on direct positive effects of one species on another. However, there is recent evidence that indirect positive effects in the form of facilitation cascades can also structure species abundances and biodiversity. Here we conceptualize a specific type of facilitation cascade-the habitat cascade. The habitat cascade is defined as indirect positive effects on focal organisms mediated by successive facilitation in the form of biogenic formation or modification of habitat. Based on a literature review, we demonstrate that habitat cascades are a general phenomenon that enhances species abundance and diversity in forests, salt marshes, seagrass meadows, and seaweed beds. Habitat cascades are characterized by a hierarchy of facilitative interactions in which a basal habitat former (typically a large primary producer, e.g., a tree) creates living space for an intermediate habitat former (e.g., an epiphyte) that in turn creates living space for the focal organisms (e.g., spiders, beetles, and mites). We then present new data on a habitat cascade common to soft-bottom estuaries in which a relatively small invertebrate provides basal habitat for larger intermediate seaweeds that, in turn, generate habitat for focal invertebrates and epiphytes. We propose that indirect positive effects on focal organisms will be strongest when the intermediate habitat former is larger and different in form and function from the basal habitat former. We also discuss how humans create, modify, and destroy habitat cascades via global habitat destruction, climatic change, over-harvesting, pollution, or transfer of invasive species. Finally, we outline future directions for research that will lead to a better understanding of habitat cascades.