Abstract Predators are thought to play a key role in controlling herbivory, thus having positive indirect effects on plants. However, evidence for terrestrial trophic cascades is still fragmentary, perhaps due to variation in top-down forces created by environmental heterogeneity. We examined the magnitude of predation effects on foliar damage by chewing insects and mean leaf size, by excluding birds from saplings in ‘dry’ and ‘wet’Nothofagus pumilio forests in the northern Patagonian Andes, Argentina. The experiment lasted 2 years encompassing a severe drought during the La Niña phase of a strong El Niño/Southern Oscillation event, which was followed by unusually high background folivory levels. Insect damage was consistently higher in wet than in dry forest saplings. In the drought year (1999), bird exclusion increased folivory rates in both forests but did not affect tree leaf size. In the ensuing season (2000), leaf damage was generally twice as high as in the drought year. As a result, bird exclusion not only increased the extent of folivory but also significantly decreased sapling leaf size. The latter effect was stronger in the wet forest, suggesting compensation of leaf area loss by dry forest saplings. Overall, the magnitude of predator indirect effects depended on the response variable measured. Insectivorous birds were more effective at reducing folivory than at facilitating leaf area growth. Our results indicate that bird-initiated trophic cascades protect N. pumilio saplings from insect damage even during years with above-normal herbivory, and also support the view that large-scale climatic events influence the strength of trophic cascades.