Nematomorph parasites manipulate crickets to enter streams where the parasites reproduce. These manipulated crickets become a substantial food subsidy for stream fishes. We used a field experiment to investigate how this subsidy affects the stream community and ecosystem function. When crickets were available, predatory fish ate fewer benthic invertebrates. The resulting release of the benthic invertebrate community from fish predation indirectly decreased the biomass of benthic algae and slightly increased leaf break-down rate. This is the first experimental demonstration that host manipulation by a parasite can reorganise a community and alter ecosystem function. Nematomorphs are common, and many other parasites have dramatic effects on host phenotypes, suggesting that similar effects of parasites on ecosystems might be widespread.