Understanding the role of predation in regulating prey diversity is a major goal in ecology, with profound consequences for community dynamics, ecosystem structure, and conservation practice. Deterministic differential equation models predict that some predation regimes, such as prey-switching predation, should promote prey coexistence and increase prey diversity. However, such models do not capture stochastic population fluctuations that are ubiquitous in empirical study sites and nature reserves. In this article, we examine the effects of prey-switching predation on the species richness of prey communities with demographic noise. We show that in finite, discrete prey populations, the ability of prey-switching predation to promote diversity depends on the carrying capacity of the prey community and the richness of the source pool for prey. Identical predation regimes may have opposite effects on prey diversity depending on the size and productivity of the habitat or the metacommunity richness. Statistical properties of the fluctuations of prey populations determine the effect of stabilizing mechanisms on species richness. We discuss the implications of this result for empirical studies of predation in small study areas and for the management of small nature reserves.