Various entities have been designated keystone resources, but few tests have been attempted and we are unaware of any experimental manipulations of purported keystone resources. Mistletoes (Loranthaceae) provide structural and nutritional resources within canopies, and their pervasive influence on diversity led to their designation as keystone resources. We quantified the effect of mistletoe on diversity with a woodland-scale experiment, comparing bird diversities before and after all mistletoe plants were removed from 17 treatment sites, with those of 11 control sites and 12 sites in which mistletoe was naturally absent. Three years after mistletoe removal, treatment woodlands lost, on average, 20.9 per cent of their total species richness, 26.5 per cent of woodland-dependent bird species and 34.8 per cent of their woodland-dependent residents, compared with moderate increases in control sites and no significant changes in mistletoe-free sites. Treatment sites lost greater proportions of birds recorded nesting in mistletoe, but changes in species recorded feeding on mistletoe did not differ from control sites. Having confirmed the status of mistletoe as a keystone resource, we suggest that nutrient enrichment via litter-fall is the main mechanism promoting species richness, driving small-scale heterogeneity in productivity and food availability for woodland animals. This explanation applies to other parasitic plants with high turnover of enriched leaves, and the community-scale influence of these plants is most apparent in low productivity systems.