Degradation of habitat is a direct outcome of anthropogenic activities, which includes urbanization, mining, the emission of industrial waste, and many others. Many living organisms experience severe surviving challenges as a result of habitat degradation. Here, we have studied the impact of habitat destruction caused by human activities on the dynamics of a prey-predator interaction with prey refuge. Our analyses reveal that a higher rate of habitat destruction than the habitat regeneration rate is always detrimental to the survival of predators. Predator species may still be threatened with extinction even if the rate of habitat degradation is slightly lower than the habitat recovery rate. So, in order to maintain biodiversity , we must appropriately step up our efforts to slow down the rate of habitat degradation as well as accelerate the habitat restoration. Further, our investigation suggests that in order to achieve cohabitation, we should effectively control the habitat deterioration caused by human activity, rather than artificially introducing or eliminating the hiding places of prey species.