In response to herbivory, plants have evolved defense strategies to reduce herbivore preference and performance. A strategy whereby defenses are induced only upon herbivory can mitigate costs of defense when herbivores are scarce. Although costs and benefits of induced responses are generally assumed, empirical evidence for many species is lacking. Soybean (Glycine max L. Merr.) has emerged as a model species with which to address questions about induced responses. To our knowledge, this is the first study to examine the fitness costs and benefits of jasmonic acid-induced responses by soybean in the absence and presence of soybean loopers (Chrysodeix includens Walker) (Lepidoptera: Noctuidae). In a greenhouse experiment we demonstrated that soybean induction was costly. Induced plants produced 10.1% fewer seeds that were 9.0% lighter, and had 19.2% lower germination rates than noninduced plants. However, induction provided only modest benefits to soybeans. In a choice experiment, soybean loopers significantly preferred leaves from noninduced plants, consuming 62% more tissue than from induced plants. Soybean loopers that fed on plants that were previously subjected to treatment with jasmonic acid matured at the same rate and to the same size as those that fed on control plants. However, at high conspecific density, soybean looper survivorship was reduced by 44% on previously induced relative to control plants. Reduced soybean looper preference and survivorship did not translate into fitness benefits for soybeans. Our findings support theoretical predictions of costly induced defenses and highlight the importance of considering the environmental context in studies of plant defense.