Only a fraction of the individuals in a given prey population are likely to be killed and consumed by predators. In contrast, nearly all individuals experience the chronic effects of predation risk. When threatened by predators, prey adopt defensive tactics whose costs can lead to reduced growth, maturation rates, survivorship, fecundity, or population density. This nonconsumptive impact of predation risk on prey is known as a trait‐mediated interaction (TMI) because it results from changes in prey traits such as behavior or physiology. Ecological theory suggests that the strength of TMI effects will reflect a balance between the conflicting demands of reproduction vs. predator avoidance. Competitor density and resource availability are expected to alter the balance between these conflicting forces. We conducted a meta‐analysis of experimental studies that measured TMI effect size while varying competitor and/or resource density. The threat of predation had an overall negative effect on prey performance, but the strength of this effect varied with the level of competition. High competition exacerbated the negative effect of intimidation on prey density but moderated the negative effect of intimidation on prey life history and growth. We discuss these results in light of previously published theoretical expectations. Our results highlight the variable and context‐dependent nature of interspecific interactions.