We investigate the disorder-driven phase transition from a fractional quantum Hall state to an Anderson insulator using quantum entanglement methods. We find that the transition is signaled by a sharp increase in the sensitivity of a suitably averaged entanglement entropy with respect to disorder—the magnitude of its disorder derivative appears to diverge in the thermodynamic limit. We also study the level statistics of the entanglement spectrum as a function of disorder. However, unlike the dramatic phase-transition signal in the entanglement entropy derivative, we find a gradual reduction of level repulsion only deep in the Anderson insulating phase.