The propensity for cannibalism varies considerably both within and between species. Currently we have little understanding of both the causes of this variation and its evolutionary consequences for other life-history traits. We examine how different levels of spatial structure affect the evolution of cannibalism and how cannibalism in turn drives the evolution of dispersal. Using pair approximations and simulations, we show that cannibalism can easily evolve in spatially structured populations as long as some dispersal exists. Furthermore, for a wide range of intermediate levels of spatial structure, we find the possibility of evolutionary branching leading to polymorphism in cannibalism. We also show that cannibalism itself can have important evolutionary consequences and select for increased dispersal rates, thus helping to determine the spatial structure of populations. The coevolution of cannibalism and dispersal results in the evolution of various alternative life-history strategies with different dispersal and cannibalism regimes. Which strategy evolves depends on the environmental conditions that determine initial cannibalism rates. Our results therefore suggest that differences in spatial structure could explain variation in the propensity for cannibalism and cannibalistic polyphenism. Furthermore, results emphasize that cannibalism can drive the evolution of other life-history traits and determine the spatial structure of natural populations.