Shrub encroachment into arid grasslands occurs globally with the potential to affect vertebrates and their interactions. In the Chihuahuan Desert of southern New Mexico, shrub encroachment has prompted intensive efforts by land management agencies to remove shrubs and restore historical grassland habitats. We asked if restoration actions involving shrub removal affected dynamics of intraguild predation (IGP) including an IGP predator (coyote, Canis latrans), an IGP prey (kit fox, Vulpes macrotis), plus their shared lagomorph prey. We used camera traps on 14 sites with paired treated and untreated areas to examine spatial and temporal niche partitioning of coyotes and kit foxes. Shrub removal did not produce straightforward effects on abundances of coyotes, kit foxes, or their prey resources. Instead, abundances of kit foxes were constrained when coyote abundance reached a threshold. Below this threshold, kit foxes were more common on areas with low shrub cover, possibly due to lack of hiding cover for lagomorph prey that increased their predation risk. Our system included two alternative states: IGP predator dominated and coexistence of IGP predator and prey. Coexistence may have been facilitated by temporal niche partitioning as diel activity patterns differed for coyotes and kit foxes. Future research on intraguild predation should integrate spatial and temporal niches to understand species coexistence including on dynamic landscapes undergoing restoration.