The Lower Keys marsh rabbit (Sylvilagus palustris hefneri) is one of many endangered endemic species of the Florida Keys. The main threats are habitat loss and fragmentation from sea‐level rise, development, and habitat succession. Exotic predators such as free‐ranging domestic cats (Felis catus) pose an additional threat to these endangered small mammals. Management strategies have focused on habitat restoration and exotic predator control. However, the effectiveness of predator removal and the effects of anthropogenic habitat modifications and restoration have not been evaluated. Between 2013 and 2015, we used camera traps to survey marsh rabbits and free‐ranging cats at 84 sites in the National Key Deer Refuge, Big Pine Key, Florida, USA. We used dynamic occupancy models to determine factors associated with marsh rabbit occurrence, colonization, extinction, and the co‐occurrence of marsh rabbits and cats during a period of predator removal. Rabbit occurrence was positively related to freshwater habitat and patch size, but was negatively related to the number of individual cats detected at each site. Furthermore, marsh rabbit colonization was negatively associated with relative increases in the number of individual cats at each site between survey years. Cat occurrence was negatively associated with increasing distance from human developments. The probability of cat site extinction was positively related to a 2‐year trapping effort, indicating that predator removal reduced the cat population. Dynamic co‐occurrence models suggested that cats and marsh rabbits co‐occur less frequently than expected under random conditions, whereas co‐detections were site and survey‐specific. Rabbit site extinction and colonization were not strongly conditional on cat presence, but corresponded with a negative association. Our results suggest that while rabbits can colonize and persist at sites where cats occur, it is the number of individual cats at a site that more strongly influences rabbit occupancy and colonization. These findings indicate that continued predator management would likely benefit endangered small mammals as they recolonize restored habitats.