The effect of native vegetation on the distribution of the green ant, Oecophylla smaragdina, and the main insect pests in cashew, Anacardium occidentale, plantations in tropical northern Australia was studied by field surveys and by observations. O. smaragdina was an efficient predator and the most abundant ant species in cashew plantations. Infestations of the main insect pests in the trees lacking ant nests were significantly higher than in those with ant nests. Although O. smaragdina were abundant on a wider range of native tree species, they preferred Acacia aulacocarpa and Planchonia careya, and they also thrived on cashew trees after dispersing into cashew plantations. In cashew plantations, O. smaragdina preferentially colonized trees with thick canopies irrespective of tree height. Fierce fights between O. smaragdina colonies were a major factor responsible for changes in population sizes, colonization and distribution of O. smaragdina in cashew plantations. The availability of preferred native trees and the distance between the native vegetation and the cashew plantation appear to play important roles in both the rate and the pattern of initial colonization of cashew plantations by O. smaragdina. These factors also indirectly influence the distribution and abundance of the insect pests of cashews. We suggest that, in the management of modern cashew crops, managers cannot rely on the natural dispersal of O. smaragdina to control insect pests. We recommend the use of native trees to enhance O. smaragdina populations in controlling cashew insect pests.