The role of positive interactions in structuring plant and animal communities is increasingly recognized, but the generality of current theoretical models has remained practically unexplored in animal communities. The stress gradient hypothesis predicts a linear increase in the intensity of facilitation as environmental conditions become increasingly stressful, whereas other theoretical models predict a maximum at intermediate environmental stress. We tested how competition and facilitation between herbivores change over a manipulated gradient of nutrient availability. We studied the effect of grazing by pond snails (Lymnaea stagnalis L.) as bulk grazers on aquatic caterpillars (Acentria ephemerella Denis and Schiffermüller) as small specialist grazers along an experimental gradient of environmental nutrient concentration. Higher nutrient levels increased overall total plant biomass but induced a shift toward dominance of filamentous algae at the expense of macrophytes. Facilitation of caterpillars by snail presence peaked at intermediate nutrient levels. Both caterpillar biomass and caterpillar grazing on macrophytes were highest at intermediate nutrient levels. Snails facilitated caterpillars possibly by removing filamentous algae and increasing access to the macrophyte resource, whereas they did not affect macrophyte biomass or C : nutrient ratios, a measure of food quality. We conclude that competition and facilitation in herbivore communities change along nutrient availability gradients that affect plant biomass and community composition. Understanding how interspecific interactions may change in strength and direction along environmental gradients is important to predict how the diversity and structure of communities may respond to the introduction or removal of herbivore species in ecosystems.