Predation by visual predators is often affected by light conditions and may therefore exhibit strong diel variation. The dominant predators on grass shrimp, Palaemonetes pugio, are finfish predators that are thought to locate their prey by visual cues. We examined the response of grass shrimp to diel variation in predation risk in the nearshore shallow waters of the Chesapeake Bay. We used diel shoreline seines to assess the relative abundance of predators. We assessed the relative risk of predation with shrimp tethered at refuge (30 cm) and nonrefuge (60 cm) depths. To measure grass shrimp response to predation risk, we used dipnets to monitor habitat use. Four predominantly visual predators dominated the shoreline seine catches, Fundulus heteroclitus, Micropogonias undulatus, Morone americana and Morone saxatilis. Total predator abundance had a diel component, with dramatic nighttime decreases in total abundance, whereas guild composition and relative abundance remained unchanged. Relative predation risk for tethered shrimp exhibited significant time by habitat interaction. During the day, depth negatively affected survivorship of tethered shrimp while at night overall survivorship increased and there was no effect of depth. Shrimp habitats use reflected diel predation risks. Abundances in the near shore were highest during the day with decreased abundances at night. Together, the seine and tethering data highlight the importance for a refuge (e.g., shallow water) from predation during the daytime and a relaxation of predation pressure at night.