Herbivorous insects have evolved many mechanisms to overcome plant chemical defenses, including detoxification and sequestration. Herbivores may also use toxic plants to reduce parasite infection. Plant toxins could directly interfere with parasites or could enhance endogenous immunity. Alternatively, plant toxins could favor down-regulation of endogenous immunity by providing an alternative (exogenous) defense against parasitism. However, studies on genome-wide transcriptomic responses to plant defenses and the interplay between plant toxicity and parasite infection remain rare. Monarch butterflies (Danaus plexippus) are specialist herbivores of milkweeds Asclepias spp.), which contain toxic cardenolides. Monarchs have adapted to cardenolides through multiple resistance mechanisms and can sequester cardenolides to defend against bird predators. In addition, high-cardenolide milkweeds confer monarch resistance to a specialist protozoan parasite (Ophryocystis elektroscirrha). We used this system to study the interplay between the effects of plant toxicity and parasite infection on global gene expression. We compared transcriptional profiles between parasite-infected and uninfected monarch larvae reared on two milkweed species. Our results demonstrate that monarch differentially express several hundred genes when feeding on A. curassavica and A. incarnata, two species that differ substantially in cardenolide concentrations. These differentially expressed genes include genes within multiple families of canonical insect detoxification genes, suggesting that they play a role in monarch toxin resistance and sequestration. Interestingly, we found little transcriptional response to infection. However, parasite growth was reduced in monarchs reared on A. curassavica, and in these monarchs, several immune genes were down-regulated, consistent with the hypothesis that medicinal plants can reduce reliance on endogenous immunity.