We study spatial lottery models of competition between two plant species in which competitive ability is affected by levels of herbivory. Herbivory may enhance plant diversity in two qualitatively different ways. The first is global frequency dependence; the level of herbivory suffered by a plant decreases as the species becomes rare. Second, spatial variability in levels of herbivory can create ephemeral, local refuges for herbivory for each plant species. Both of these mechanisms operate only if there is not a negative correlation between a plant's palatability and its competitive ability. Both mechanisms also require that herbivores have sufficiently strong diet preferences (or, equivalently, that the plants have sufficiently different grazing tolerances). If there is no relationship between palatability and competitive ability, then plant diversity is a monotonically increasing function of the herbivore's degree of monophagy. In contrast, if there is a positive correlation between palatability and competitive ability, then the diversity/degree-of-monophagy relationship may be either monotonically increasing or humped.