Despite widespread interest in the impact of herbivores on plants, very few studies have addressed the morphological mechanisms by which plants compensate for losses due to herbivore attack, and fewer still have examined compensation in long-lived, herbaceous species. I conducted a 3-yr experimental study of dwarf fireweed's (Epilobium latifolium) responses to real and simulated attack by a momphid caterpillar. I found that the type and extent of plant responses change with morphological and temporal scale. For instance, damaged shoots showed effective compensation, producing between 89 and 583% more branch tissue than undamaged shoots. However, clumps of shoots are joined by perennial rhizomes; a single year of herbivore damage to a clump's shoots reduced net growth by > 75% over a 3-yr period. Clump form also changed following attack; in the year after damage shoot number was reduced by 51%, while mean shoot size either increased or was unaffected. Further complicating the caterpillar's impact on its host was its inhibition of mammalian herbivory: simulated caterpillar damage reduced the probability of mammalian attack from 20 to 6%. These complicated and very different changes following herbivory illustrate the need to study compensation mechanistically and in the context of a plant's biotic environment in order to understand its importance and consequences.