At small spatial scales, attraction or deterrence of herbivores by plant neighbors can alter the susceptibility of plants to damage (i.e., associational effects). Given the patchy nature of plants and insect herbivory, we hypothesized that induced resistance may play an important role in mitigating such spatial variability. To test this notion, we first documented neighbor effects between two closely related and co-occurring plant species in natural populations, and second, we measured how these effects changed after inducing plant resistance in a common garden. In wet fields and marshes of Northeastern North America, boneset (Eupatorium perfoliatum) is the primary host for the herbivorous beetle Ophraella notata. Across two years of surveys at multiple sites, we found that Joe Pye weed (Eutrochium maculatum) was a secondary host to O. notata and was more likely to receive beetle eggs when it grew near boneset, constituting a negative neighbor effect (associational susceptibility) for Joe Pye weed. Reciprocally, there were trends of reduced susceptibility for boneset when it grew near Joe Pye weed (a positive neighbor effect), but this pattern was less consistent over space and time. In the common garden, we manipulated patches, each with a center (focal) and surrounding (neighbor) plants, with focal plants of each species either induced by the plant hormone jasmonic acid or left as controls. While neighbor effects prior to induction mirrored the pattern in surveys, induction was most effective in reducing beetle oviposition on focal plants in heterospecific groups. This effectively eliminated negative neighbor effects (susceptibility) for Joe Pye weed, the less preferred plant species. However, in conspecific patches, induction had minimal effect on either species' susceptibility to beetles. Given the importance of spatial variation generally and the ubiquity of neighbor effects in plant communities, we suggest that inducible resistance may be an important mechanism to cope with spatial heterogeneity in susceptibility to herbivores.