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Abstract Ecosystem engineering is a facilitative interaction that generates bottom‐up extrinsic variability that may increase species coexistence, particularly along a stress/disturbance gradient. American alligators (Alligator mississippiensis) create and maintain ‘alligator ponds’ that serve as dry‐season refuges for other animals. During seasonal water recession, these ponds present an opportunity to examine predictions of the stress‐gradient (SGH) and intermediate disturbance hypotheses (IDH).To test the assumption that engineering would facilitate species coexistence in ponds along a stress gradient (seasonal drying), we modelled fish catch‐per‐unit‐effort (CPUE) in ponds and marshes using a long‐term dataset (1997–2022). Stomach contents (n = 1677 from 46 species) and stable isotopes of carbon and nitrogen (n = 3978 representing 91 taxa) from 2018 to 2019 were used to evaluate effects of engineering on trophic dynamics. We quantified diets, trophic niche areas, trophic positions and basal‐resource use among habitats and between seasons. As environmental stress increases, we used seasonal changes in trophic niche areas as a proxy for competition to examine SGH and IDH.Across long‐term data, fish CPUE increased by a factor of 12 in alligator ponds as the marsh dried. This validates the assumption that ponds are an important dry‐season refuge. We found that 73% of diet shifts occurred during the dry season but that diets differed among habitats in only 11% of comparisons. From wet season to dry season, both stomach contents and stable isotopes revealed changes in niche areas. Direction of change depended on trophic guild but was opposite between stable‐isotope and stomach‐content niches, except for detritivores.Stomach‐content niches generally increased suggesting decreased competition in the dry season consistent with existing theory, but stable‐isotope niches yielded the opposite. This may result from a temporal mismatch with stomach contents reflecting diets over hours, while stable isotopes integrate diet over weeks. Consumptive effects may have a stronger effect than competition on niche areas over longer time intervals.Overall, our results demonstrated that alligators ameliorated dry‐season stress by engineering deep‐water habitats and altering food‐web dynamics. We propose that ecosystem engineers facilitate coexistence at intermediate values of stress/disturbance consistent with predictions of both the SGH and IDH.