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Ecosystem engineers, organisms that modify the physical environment, are generally thought to increase diversity by facilitating species that benefit from engineered habitats. Recent theoretical work, however, suggests that ecosystem engineering could initiate cascades of trophic interactions that shape community structure in unexpected ways, potentially having negative indirect effects on abundance and diversity in components of the community that do not directly interact with the habitat modifications. We tested the indirect effects of a gall-forming wasp on arthropod communities in surrounding unmodified foliage. We experimentally removed all senesced galls from entire trees during winter and sampled the arthropod community on foliage after budburst. Gall removal resulted in 59% greater herbivore density, 26% greater herbivore richness, and 27% greater arthropod density five weeks after budburst. Gall removal also reduced the differences in community composition among trees (i.e., reduced beta diversity), even when accounting for differences in richness. The community inside galls during winter and through the growing season was dominated by jumping spiders (Salticidae; 0.87 ± 0.12 spiders per gall). We suggest that senesced galls provided habitat for spiders, which suppressed herbivorous arthropods and increased beta diversity by facilitating assembly of unusual arthropod communities. Our results demonstrate that the effects of habitat modification by ecosystem engineers can extend beyond merely providing habitat for specialists; the effects can propagate far enough to influence the structure of communities that do not directly interact with habitat modifications.