Abstract Ecological theory and empirical research show that both direct lethal effects and indirect non-lethal effects can structure the composition of communities. While the direct effects of grazers on marine phytoplankton communities are well studied, their indirect effects are still poorly understood. Direct and indirect effects are inherently difficult to disentangle in plankton food webs. In this study we evaluate the indirect effects of copepod grazers on community function and structure using isolated chemical alarm signals, copepodamides. We expose intact summer and spring communities to direct grazing from copepods, or to chemical alarm cues without the presence of grazers in controlled experiments. The effects of direct grazing on ecosystem function were moderate in both experiments as indicated by levels of chlorophyll and primary production. Indirect and direct effects resulted in changes in the composition of both the eukaryote and prokaryote communities as shown by metabarcoding of 18S and 16S rRNA. Size structure analysis suggests that direct grazing and copepodamide exposure both favoured smaller organisms (< 10–15 μm) corroborating the size-structuring effect of copepod grazers. We conclude that the well-established effect of copepods on phytoplankton communities results from a combination of direct and indirect effects. This is a first attempt to isolate indirect effects of copepods on community structure and the results suggest that a full mechanistic understanding of the structuring effect of copepods will require insights to both direct and indirect effects of consumers as demonstrated for other ecosystems components.