Chemical cues play crucial roles in the communication and interaction between phytoplankton and zooplankton. Colony enlargement of Phaeocystis globosa in the presence of grazing cues released by zooplankton has been considered as an induced defense. Colonial Phaeocystis blooms usually occur during or following blooms of diatoms, suggesting that competitive ability of Phaeocystis is less than diatoms in some cases. However, it remains unknown whether the induced defense can lead to decreased the competitive ability of Phaeocystis versus diatoms. In this study, the competitive outcomes between induced defensive P. globosa and diatom D. brightwellii exposed to the grazing cues released from copepods Pseudodiaptomus poplesia and heterotrophic dinoflagellates Oxyrrhis marina has been investigated. Results showed that P. globosa formed significantly larger colonies when it received grazing cues released by Pseudodiaptomus poplesia and O. marina, which suggested that the defensive response of P. globosa was induced by the grazing cues in this study. The induced defensive P. globosa showed more rapid colony development and longer colony durations than non-defensive P. globosa. However, grazing cues released from Pseudodiaptomus poplesia and O. marina did not induce the defensive response in terms of length, width and silicification in the D. brightwellii. P. globosa showed significantly higher biovolume than D. brightwellii in the control and Pseudodiaptomus poplesia-induced treatment, whereas the addition of grazing cues from O. marina led to the lower biovolume of P. globosa than D. brightwellii. Based on the relative biovolumes over time of P. globosa and D. brightwellii, P. globosa exposed to grazing cues from Pseudodiaptomus poplesia was more competitive than D. brightwellii, while D. brightwellii outcompeted P. globosa in the O. marina-induced treatment. The variations in competitive dynamics between two treatments could be attributed to growth responses of D. brightwellii to grazing cues, and D. brightwellii beat P. globosa in the O. marina-induced treatment indicating that D. brightwellii might be sensitive to the grazing of microzooplankton O. marina. While induced defense in terms of colony enlargement might be efficient against microzooplankton grazers, the compromised competitive ability in growth rate would cause P. globosa to be outgrown by diatoms induced growth responses to grazing cues. The decreased competitive ability in P. globosa versus D. brightwellii in the presence of grazing cues from microzooplankton, the major consumers of phytoplankton in the field, may contribute to the appearance of diatom growth prior to that of Phaeocystis in coastal blooms. Grazing cues can potentially drive the coexistence of competitive species and promote the biodiversity in the marine systems.