Herbivores can cause numerous changes in primary plant metabolism. Recent studies using radioisotopes, for example, have found that insect herbivores and related cues can induce faster export from leaves and roots and greater partitioning into tissues inaccessible to foraging herbivores. This process, termed induced resource sequestration, is being proposed as an important response of plants to cope with herbivory. Here, we review the evidence for resource sequestration and suggest that associated allocation and ecological costs may limit the benefit of this response because resources allocated to storage are not immediately available to other plant functions or may be consumed by other enemies. We then present a conceptual model that describes the conditions under which benefits might outweigh costs of induced resource sequestration. Benefits and costs are discussed in the context of differences in plant life-history traits and biotic and abiotic conditions, and new testable hypotheses are presented to guide future research. We predict that intrinsic factors related to life history, ontogeny and phenology will alter patterns of induced sequestration. We also predict that induced sequestration will depend on certain external factors: abiotic conditions, types of herbivores, and trophic interactions. We hope the concepts presented here will stimulate more focused research on the ecological and evolutionary costs and benefits of herbivore-induced resource sequestration.