Global biodiversity loss has been shown to negatively impact ecosystem functioning, with repercussions on interactions across trophic levels playing a crucial intermediary role. Communities and the interactions of insect herbivores and their parasitoids are often sensitive to environmental changes and can rapidly respond to shifts such as plant diversity loss. However, our understanding of these changes and the key drivers shaping community dynamics remains limited. Based on the world's largest tree diversity experiment, we investigated the effects of tree diversity loss on herbivore–parasitoid interactions. We found that both herbivore and parasitoid diversity were promoted by increasing tree species richness, while parasitism rates were significantly positively affected by tree species richness but negatively associated with tree functional diversity. Parasitoid community composition primarily responded directly to changes in herbivore communities, which were in turn strongly linked to tree community composition and traits. Our results highlight the crucial role of plant diversity in sustaining multitrophic biodiversity and species interactions. Our study thus provides novel insights into forest biodiversity conservation by demonstrating that diversity effects on ecosystem functioning cascade across trophic levels through interconnected species interactions.