This study investigates the diet of six breeding pairs of powerful owls in the Yarra Valley Corridor in Victoria, Australia, and compares prey consumption with prey availability. The six sites represent a continuum of habitats, ranging from urban Melbourne, through the urban fringe interface to a more forested landscape. We found that powerful owls in the Yarra Valley Corridor are reliant almost exclusively on arboreal marsupial prey as their preferred diet, with 99% of their overall diet comprising four arboreal marsupial species. These four species (the common ringtail possum, common brushtail possum, sugar glider and greater glider) were also the most abundant species observed while spotlighting; however, their abundance varied along the continuum. There was a strong positive relationship with the presence of these species in the diet and their site-specific availability, indicating that the powerful owl is a generalist hunter, preying on the most available prey at a given site and in a given season. This study suggests that food resources are high in these disturbed urban fringe sites and it is unlikely that food availability in urban environments will limit the potential survival of urban powerful owls.