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Predators impact prey populations directly through consumption and indirectly via trait-mediated effects like predator-induced emigration (PIE), where prey alter movement due to predation risk. While PIE can significantly influence prey dynamics, its combined effect with direct predation in fragmented habitats is underexplored. Habitat fragmentation reduces viable habitats and isolates populations, necessitating an understanding of these interactions for conservation. In this paper, we present a reaction–diffusion model to investigate prey persistence under both direct predation and PIE in fragmented landscapes. The model considers prey growing logistically within a bounded habitat patch surrounded by a hostile matrix. Prey move via unbiased random walks internally but exhibit biased movement at habitat boundaries influenced by predation risk. Predators are assumed constant, operating on a different timescale. We examine three predation functional responses—constant yield, Holling Type I, and Holling Type III—and three emigration patterns: density-independent, positive density-dependent, and negative density-dependent emigration. Using the method of sub- and supersolutions, we establish conditions for the existence and multiplicity of positive steady-state solutions. Numerical simulations in one-dimensional habitats further elucidate the structure of these solutions. Our findings demonstrate that the interplay between direct predation and PIE crucially affects prey persistence in fragmented habitats. Depending on the functional response and emigration pattern, PIE can either mitigate or amplify the impact of direct predation. This underscores the importance of incorporating both direct and indirect predation effects in ecological models to better predict species dynamics and inform conservation strategies in fragmented landscapes.