The development of novel plant chemical defenses and counter adaptations by herbivorous insect could continually drive speciation, producing more insect specialists than generalists. One approach to test this hypothesis is to compare closely related generalist and specialist species to reveal the associated costs and benefits of these different adaptive strategies. We use the specialized moth Heliothis subflexa, which feeds exclusively on plants in the genus Physalis, and its close generalist relative H. virescens. Specialization on Physalis plants necessitates the ability to tolerate withanolides, the secondary metabolites of Physalis species that are known to have feeding deterrent and immune inhibiting properties for other insects. Here we find that only H. subflexa benefits from the antibacterial properties of withanolides, and thereby gains a higher tolerance of the pathogen Bacillus thuringiensis. We argue that the specialization in H. subflexa has been guided to a large extent by a unique role of plant chemistry on ecological immunology.