The population density of the diamondback moth (DBM), Plutella xylostella (L.), the species diversity of its predators, parasitism on eggs, larvae and pupae, and associated yield of canola were evaluated in experimental plots where spring canola was grown either as a monoculture or strip-intercropped with annual alfalfa in the ratio of 3C:3A, 6C:3A and 9C:3A over a 2-year period. The egg density was significantly higher in monoculture than in intercrops. The highest and lowest densities of larvae and pupae of DBM were recorded in monoculture (2.9–3.2 larvae per plant and 1.14–1.20 pupae per plant) and intercrop 3C:3A (0.7–0.6 larvae per plant and 0.34–0.29 pupae per plant), respectively. Shannon diversity index (H') for species composition of the predators of DBM immature stages was lower in monoculture than in intercrops, and was similar amongst the three intercrops. Moreover, the percent parasitism for eggs, larvae and pupae was higher in intercrops than in monoculture. The dry seed weight loss was higher in monocrop (37.6–40.1%) compared to 3C:3A (7.9–8.6%), 6C:3A (19.5–21.4%) and 9C:3A (21.6–25.4%). Our results indicate that intercropping canola with annual alfalfa, especially in the ratio 3C:3A, can increase the species diversity, parasitism rates of DBM immature stages, and enhance the yield of canola. The implications of these findings, in relation to integrated pest management (IPM) in canola cropping systems, are discussed.