1. The consequences of species loss on ecosystem functioning within a single trophic level have been extensively studied. However, the loss of basal species is likely to have profound impacts on the abundance, richness and ecosystem functioning of species at higher trophic levels. 2. Here, we used experimentally established plant communities with a species richness gradient to study the effects of plant species loss on a multi-trophic insect community in the field. We measured densities and species richness of aphids and parasitic wasps (primary, secondary and facultative tertiary parasitoids of aphids) that naturally colonized the grassland plots. 3. Furthermore, we calculated two ecosystem functions: aphid load (the number of aphid individuals per host plant biomass used as a proxy for herbivory) and parasitism rate. We used structural equation models to explore pathways of direct and indirect effects of plant species richness on higher trophic levels. 4. We found that the densities and richness of species at all trophic levels were influenced by changes in plant species richness. The effects were rarely direct, but instead mediated by the abundance and species richness of aphid host plants and subsequent trophic levels. 5. The herbivore and primary parasitoid levels were most directly affected by changes in plant species richness, with highest insect densities and species richness occurring at intermediate plant species richness. The densities and species richness of secondary parasitoids declined linearly with plant species richness owing to sparser resources, resulting in shorter food chains in communities with the highest plant species richness. 6. Aphid load was highest at intermediate plant species richness and negatively affected by both host plant biomass and host plant species richness. Parasitism rate was mostly affected indirectly via aphid density and overall only weakly negatively related to plant species richness. 7. Our results demonstrate that plant species richness can have strong cascading effects up to high trophic levels. However, their direction may differ at the lower and higher ends of the plant species richness spectrum, cautioning against simplifying consequences of plant species loss for specialist food webs that may become limited by sparse resources at high plant richness.