We investigate the dynamics of a delayed nonlinear Mathieu equation:in the neighborhood of δ = 1/4. Three different phenomena are combined in this system: 2:1 parametric resonance, cubic nonlinearity, and delay. The method of averaging (valid for small ε) is used to obtain a slow flow that is analyzed for stability and bifurcations. We show that the 2:1 instability region associated with parametric excitation can be eliminated for sufficiently large delay amplitudes β, and for appropriately chosen time delays T . We also show that adding delay to an undamped parametrically excited system may introduce effective damping.