In many cases of interspecific kleptoparasitism, hosts develop defensive behaviors to minimize the impact of kleptoparasites. Because vigilance and defensive behaviors are often costly, selection should favor hosts that adjust the amount of investment needed to minimize losses to kleptoparasitism. However, examples of such facultative responses are rare. Here, we investigate the response of cooperatively breeding pied babblers (Turdoides bicolor) to the drongo (Dicrurus adsimilis), an avian kleptoparasite that regularly follows pied babbler groups, often giving alarm calls to alert the group to predators but also occasionally giving false alarm calls in order to steal food items. We show that pied babbler response to drongos varies markedly according to babbler group size. In small groups, where there are few individuals available to act as sentinels, babblers sentinel less when a drongo is present and respond strongly to drongo alarm calls. However, in large groups, where there are many individuals available to participate in predator vigilance, babblers sentinel more often when a drongo is present, rarely respond to drongo alarm calls, and aggressively displace drongos, with a consequent decline in the number of successful kleptoparasitism events. This behavior represent a facultative response to a kleptoparasite according to the costs versus benefits of tolerating their presence.