Trophic regulation models suggest that the magnitude of herbivory and predation (top-down forces) should vary predictably with habitat productivity. Theory also indicates that temporal abiotic variation and within-trophic level heterogeneity both affect trophic dynamics, but few studies addressed how these factors interact over broad-scale environmental gradients. Here we document herbivory from leaf-feeding insects along a natural rainfall/productivity gradient in Nothofagus pumilio forests of northern Patagonia, Argentina, and evaluate the impact of insectivorous birds on foliar damage experienced by tree saplings at each end of the gradient. The study ran over three years (1997–2000) comprising a severe drought (1998–1999), which allowed us to test how climatic events alter top-down forces. Foliar damage tended to increase towards the xeric, least productive forests. However, we found a predictable change of insect guild prevalence across the forest gradient. Leaf miners accounted for the greater damage recorded in xeric sites, whereas leaf chewers dominated in the more humid and productive forests. Interannual folivory patterns depended strongly on the feeding guild and forest site. Whereas leaf-miner damage decreased during the drought in xeric sites, chewer damage increased after the drought in the wettest site. Excluding birds did not affect leaf damage from miners, but generally increased chewer herbivory on hydric and xeric forest saplings. Indirect effects elicited by bird exclusion became most significant after the drought, when total folivory levels were higher. Thus, interannual abiotic heterogeneity markedly influenced the amount of folivory and strength of top-down control observed across the forest gradient. Moreover, our results suggest that spatial turnovers between major feeding guilds may need be considered to predict the dynamics of insect herbivory along environmental gradients.