Plants differ greatly in their susceptibility to insect herbivory, suggesting both local adaptation and resistance tradeoffs. We used maize (Zea mays) recombinant inbred lines to map a quantitative trait locus (QTL) for the maize leaf aphid (Rhopalosiphum maidis) susceptibility to maize Chromosome 1. Phytochemical analysis revealed that the same locus was also associated with high levels of 2-hydroxy-4,7-dimethoxy-1,4-benzoxazin-3-one glucoside (HDMBOA-Glc) and low levels of 2,4-dihydroxy-7-methoxy-1,4-benzoxazin-3-one glucoside (DIMBOA-Glc). In vitro enzyme assays with candidate genes from the region of the QTL identified three O-methyltransferases (Bx10a-c) that convert DIMBOA-Glc to HDMBOA-Glc. Variation in HDMBOA-Glc production was attributed to a natural CACTA family transposon insertion that inactivates Bx10c in maize lines with low HDMBOA-Glc accumulation. When tested with a population of 26 diverse maize inbred lines, R. maidis produced more progeny on those with high HDMBOA-Glc and low DIMBOA-Glc. Although HDMBOA-Glc was more toxic to R. maidis than DIMBOA-Glc in vitro, BX10c activity and the resulting decline of DIMBOA-Glc upon methylation to HDMBOA-Glc were associated with reduced callose deposition as an aphid defense response in vivo. Thus, a natural transposon insertion appears to mediate an ecologically relevant trade-off between the direct toxicity and defense-inducing properties of maize benzoxazinoids.