The natural occurrence of dogwood anthracnose (Discula destructiva) on young dogwood seedlings planted in different microenvironments in the southern Appalachian Mountains provided an opportunity to examine the effects of biotic stress on phenolic defense and insect herbivory. Dogwood trees planted in forest understory, canopy gaps, and along forest edge sustained high levels of infection and mortality. In contrast, trees planted in full sun and under shade cloth in an adjacent open field sustained much lower levels of infection and no mortality. No consistant relationships were present between anthracnose infection, phenolic defenses and herbivore performance. Nevertheless, the tendency for moderately infected dogwood saplings to have higher levels of plant tannins than uninfected trees may suggest an immune response. Insect herbivory was relatively unaffected by the degree of anthracnose infection.