The koala is the quintessential specialist herbivore, feeding almost exclusively on Eucalyptus foliage. Consequently, the limitations imposed on the koala's diet by plant defences indicate the extent to which evolutionary adaptations allow mammalian herbivores to circumvent such defences. We tested whether a recently discovered group of plant secondary metabolites, the formylated phloroglucinol compounds (FPCs), deters koalas from feeding on some eucalypt foliage. We found that captive koalas ate less foliage in a single night from trees with high FPC concentrations. Individual trees also differ in the types of FPC they possess, but for a given eucalypt species, most FPCs were similarly effective deterrents. Two closely related and sympatric eucalypt species could be clearly separated by the amounts that koalas ate from each; however, this difference could not be explained by total FPC concentrations alone. We suggest, that in this case, the presence of a distinct type of FPC deters koala herbivory on the less palatable species, and may have facilitated the evolutionary divergence of these species. We conclude that plant defences probably play an important role in determining the distribution and abundance of koalas.