1) Diversity among species and genetic diversity within species are both important components of ecological communities that can determine the outcome of species interactions, especially between hosts and parasites. We sought to understand the impact of species diversity on host community resistance to infection by a keystone parasitic plant (Rhinanthus minor L.) and genetic diversity of the parasite on its successful establishment in a grassland community. 2) We used an experimental approach where large pots were planted with mixtures of mesotrophic grassland species at high and low species diversity. The parasitic plant was sown in a proportion of these with high and low genetic diversity treatments. Establishment of the parasite was monitored over two years and the pots harvested at the end of each growing season to determine the impact of infection on plant community biomass. 3) We found a strong effect of host plant species diversity on the establishment of the parasitic plant, with successful establishment considerably lower in the high species diversity treatment. Genetic diversity appeared to promote establishment of the parasite in the high species diversity treatment, and also facilitated longer-term fitness in the low species diversity treatment. Host community structure was influenced by R. minor, with grass relative biomass decreasing and legume relative biomass increasing when the parasite was present. There was no direct impact of the presence of the parasite on the relative biomass of non-leguminous forbs. 4) Synthesis: Our data demonstrate the importance of host community species diversity in deterring the establishment of a generalist parasite. They also highlight the role of genetic diversity in determining the outcome of host-parasite interactions in multi-species communities. These findings, therefore, have important implications for the establishment and management of species rich grasslands and provide insight into the community dynamics of parasitic plants and their hosts.