Host diversity and spatial heterogeneity are both predicted to impact parasite evolution, and these processes may interact in nature to impact local adaptation. Here, we experimentally evolve granulosis virus in microcosms of its Plodia interpunctella host with varied spatial structure and host genetic diversity. We find that virus evolves specific interactions with its locally familiar host genotype in both homogeneous and spatially heterogeneous host populations, but that the impact of local adaptation depends on the spatial structure. In one treatment, exploitation rates are higher on the familiar host, while, in the other, they are lower. While we find that food viscosity had unexpected impacts on the spatial structuring of contacts, spatially structured transmission may have led to the virus evolving more prudent exploitation rates on only the familiar host, leading to locally maladapted high exploitation rates on foreign hosts. Additionally, we also find that virus in heterogeneous microcosms is more locally adapted when there are higher contact rates between the hosts. Our experiment demonstrates that trade-offs optimizing exploitation rates at intermediate values, like those governing pathogen infectivity in spatial structure, may interact with trade-offs determining niche breadth in ways that can reverse the impact of local adaptation on pathogen phenotypes.