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1. Changes in one prey species' density can indirectly affect the abundance of another prey species if a shared predator eats both species. Sometimes, indirect effects occur when prey straddle habitats, including when riparian predator populations grow in response to emergent aquatic insects and increase predation on terrestrial prey. However, predators may largely switch to aquatic insects or become satiated, reducing predation on terrestrial prey. 2. To determine the net indirect effect of aquatic insects on terrestrial arthropods via generalist spider predators, a field experiment was conducted mimicking midge influx and a wolf spider numerical response inside enclosures near an Icelandic lake. Lab mesocosms were also used to assess per capita rates of spider predation under differing levels of midge abundance. 3. Midges always decreased sentinel prey predation, but this effect increased with predator density. When midges were absent, predation increased 30% at a high spider density, but predation was equal between spider treatments when midges were present. In situ arthropods showed no effect of midge or spider treatments, although non-significant abundance patterns were observed congruent with sentinel prey results. 4. In lab mesocosms, prey survivorship increased ≥50% where midges were present and rapidly saturated; the addition of 5, 20, 50, and 100 midges equivalently reduced spider predation, supporting predator distraction rather than satiation as the root cause. 5. The present results demonstrate a strong positive indirect effect of midges and broadly support the concept that predator responses to alternative prey are a major influence on the magnitude and direction of predator-mediated indirect effects. [ABSTRACT FROM AUTHOR]