It is critical for prey to recognise predators and distinguish predators from non-threatening species. Yet, we have little understanding of how prey develop effective predator recognition templates. Recent studies suggest that prey may actually learn key predator features which can be used to recognise novel species with similar characteristics. However, non-predators are sometimes mislabelled as predators when generalising recognition. Here, we conduct the first comprehensive investigation of how prey integrate information on predator odours and predator diet cues in generalisation, allowing them to discriminate between predators and non-predators. We taught lemon damselfish to recognise a predator fed a fish diet, and tested them for their response to the known predator and a series of novel predators (fed fish diet) and non-predators (fed squid diet) distributed across a phylogenetic gradient. Our findings show that damselfish distinguish between predators and non-predators when generalising recognition. Additional experiments revealed that generalised recognition did not result from recognition of predator odours or diet cues, but that damselfish based recognition on what they learned during the initial conditioning. Incorporating multiple sources of information enables prey to develop highly plastic and accurate recognition templates that will increase survival in patchy environments where they have little prior knowledge.