1. Specialized insect herbivores commonly co-opt plant defences for protection against predators, but the costs, benefits, and mechanisms of sequestration are poorly understood. 2. We quantified sequestration of toxic cardenolides by the specialist aphid Aphis nerii when reared on four closely related milkweed (Asclepias) species with >20-fold variation in cardenolide content, and in the presence or absence of ladybug predators. 3. Increasing concentrations of apolar plant cardenolides increased sequestered amounts in aphids. High concentrations in plants impaired aphid population growth, but also reduced the top-down effects of predators. All aphids accumulated two cardenolides not present in their host plant, even on plants with very low foliar cardenolide concentrations. 4. An in vitro enzymatic assay of total cardenolides in aphid bodies using the cardenolides’ target (animal Na+/K+-ATPase) revealed that the subset of sequestered cardenolides is disproportionally more toxic than cardenolides in leaves. 5. Sequestration of cardenolides by Aphis nerii thus involves the accumulation of modified plant cardenolides, as well as the concentration-dependent passive uptake of more potent apolar plant cardenolides. Host plant choice by the aphid is thus subject to conflicting demands of higher growth performance versus superior defence against predators.