This paper deals with species sensitivity distributions (SSDs) for the lipophilic insecticide lufenuron and benthic arthropods based on sediment-spiked laboratory toxicity tests. This compound that inhibits chitin synthesis and moulting of arthropods persists in sediment. Using field-collected sediment, toxicity tests were conducted with three macro-crustaceans and six insects. The Hazardous Concentration to 5% of the tested species, the HC5 (and 95% confidence limit), derived from an SSD constructed with 10d-LC50′s was 2.2 (1.2–5.7) μg/g organic carbon (OC) in dry sediment. In addition, HC5 values derived from SSDs constructed with 28d-LC10 and 28-d LC50 values were 0.13 (0.02–1.50) μg/g OC and 2.0 (1.3–5.5) μg/g OC, respectively. In 28d toxicity tests with Chironomus riparius and Hyalella azteca, a higher sensitivity was observed when using lufenuron-spiked field-collected sediment than in lufenuron-spiked artificial sediment. Overall, the non-biting midge C. riparius appeared to be a representative and sensitive standard test species to assess effects of lufenuron exposure in sediment. The Tier-1 (based on standard test species), Tier-2 (based on standard and additional test species) and Tier-3 (model ecosystem approach) regulatory acceptable concentrations (RACs) for sediment-spiked lufenuron did not differ substantially. The Tier-2 RAC was the lowest. Since to our knowledge this study is the first in the open literature that evaluates the tiered approach in the sediment effect assessment procedure for pesticides, we advocate that similar evaluations should be conducted for pesticides that differ in toxic mode-of-action.