Identification of habitable planets beyond our solar system is a key goal of current and future space missions. Yet habitability depends not only on the stellar irradiance, but equally on constituent parts of the planetary atmosphere. Here we show, for the first time, that radiatively active mineral dust will have a significant impact on the habitability of Earth-like exoplanets. On tidally-locked planets, dust cools the day-side and warms the night-side, significantly widening the habitable zone. Independent of orbital configuration, we suggest that airborne dust can postpone planetary water loss at the inner edge of the habitable zone, through a feedback involving decreasing ocean coverage and increased dust loading. The inclusion of dust significantly obscures key biomarker gases (e.g. ozone, methane) in simulated transmission spectra, implying an important influence on the interpretation of observations.We demonstrate that future observational and theoretical studies of terrestrial exoplanets must consider the effect of dust.