Costs of parasitism are commonly measured by comparing the performance of infected groups of individuals to that of uninfected control groups. This measure potentially underestimates the cost of parasitism because it ignores indirect costs, which may result from the modification of the competitiveness of the hosts by the parasite. In this context, we used the host-parasite system consisting of the yellow fever mosquito Aedes aegypti and the microsporidian parasite Vavraia culicis to address this question: Do infected individuals exert a more or less intense intraspecific competition than uninfected individuals? Our experimental results show that, indeed, infected hosts incur a direct cost of parasitism: It takes them longer to become adults than uninfected individuals. They also incur an indirect cost, however, which is actually larger than the direct cost: When grown in competition with uninfected individuals they develop even slower. The consequence of this modification of competitiveness is that, in our system, the cost of parasitism is underestimated by the traditional measure. Moreover, because the indirect cost depends on the frequency of interactions between infected and uninfected individuals, our results suggest that the real cost of parasitism, i.e., virulence, is negatively correlated with the prevalence of the parasite. This link between prevalence and virulence may have dynamical consequences, such as reducing the invasion threshold of the parasite, and evolutionary consequences, such as creating a selection pressure maintaining the host's constitutive resistance to the parasite.