Introduced vespid wasps (Vespula germanica and V. vulgaris) are highly efficient predators of native invertebrates. They have the potential to reduce populations of threatened species and change ecosystem dynamics, yet their impact is largely unknown in Australia. The introduction of vespid wasps has coincided with a decline in numbers of threatened Ptunarra brown butterflies (Oreixenica ptunarra) in Tasmania, Australia. The Ptunarra brown butterfly is endemic to Tasmania, where its habitat has been fragmented by clearance for agriculture and forestry. Local extinctions of the species were previously thought to be principally due to its inability to fly the long distances between habitat patches in this disjointed landscape. We investigate the importance of the new threat of vespid wasp predation in the decline of O. ptunarra in the highland grasslands of northwest Tasmania. Numbers of O. ptunarra analysed over a period of 15 years dramatically declined after the arrival of vespid wasps. Wasp control was trialled to determine whether it affected butterfly numbers. Current control methods decreased wasp numbers considerably, resulting in a small increase in butterfly numbers, indicating that wasp predation is keeping O. ptunarra at low densities. Without ongoing conservation measures, it is likely that butterfly numbers will stay low, potentially leading to genetic bottlenecks and more local extinctions. An increase in the intensity of wasp control, in combination with other conservation management methods, is required for the protection and recovery of O. ptunarra.