Many dinoflagellate species form dormant resting cysts as a part of their life cycle, and in some freshwater species, hatching of these cysts can be delayed by the presence of water-borne signals from grazing zooplankton. Some marine dinoflagellates can form temporary cysts, which may function to resist unfavourable short-term environmental conditions. We investigated whether the marine dinoflagellate Alexandrium ostenfeldii is able to induce an increased resistance to the parasitic flagellate Parvilucifera infectans by forming temporary cysts. We performed several laboratory experiments where dinoflagellates were exposed either to direct contact with parasites or to filtered water from cultures of parasite-infected conspecifics (parasite-derived signals). Infection by P. infectans is lethal to motile A. ostenfeldii cells, but temporary cysts were more resistant to parasite infection. Furthermore, A. ostenfeldii induced a shift in life-history stage (from motile cells to temporary cysts) when exposed to parasite-derived water-borne signals. The response was relaxed within a couple of hours, indicating that A. ostenfeldii may use this behaviour as a short-term escape mechanism to avoid parasite infection. The results suggest that intraspecies chemical communication evoked by biotic interactions can be an important mechanism controlling life-history shifts in marine dinoflagellates, which may have implications for the development of toxic algal blooms.