Food chain length is an important property of ecosystems, but the mechanisms maintaining it remain elusive. Classical views suggest that energetic inefficiencies (the “energy-flow hypothesis”) limit food chain length, but others have argued that better explanations reside in more complex scenarios that consider the stability of food webs or the combined effects of productivity and ecosystem size. We argue that abandonment of the energy-flow hypothesis is premature. For a simple tritrophic rocky intertidal food chain, we show that the efficiency of energy transfer is strongly influenced by predation risk and consumer density. Effects tied to predation risk were particularly strong, explaining 32% of the variation in growth efficiency (compared to 15% for density effects) and reducing it by 44–76%. Hence, the stress (fear of being eaten) that predators impose on prey may be instrumental in limiting energy transfer up the food chain and thus contribute to the shortening of food chains.