Virulence, the degree to which a pathogen harms its host, is an important but poorly understood aspect of host-pathogen interactions. Virulence is not static, instead depending on ecological context and potentially evolving rapidly. For instance, at the start of an epidemic, when susceptible hosts are plentiful, pathogens may evolve increased virulence if this maximizes their intrinsic growth rate. However, if host density declines during an epidemic, theory predicts evolution of reduced virulence. Although well-studied theoretically, there is still little empirical evidence for virulence evolution in epidemics, especially in natural settings with native host and pathogen species. Here, we used a combination of field observations and lab assays in the Daphnia-Pasteuria model system to look for evidence of virulence evolution in nature. We monitored a large, naturally occurring outbreak of Pasteuria ramosa in Daphnia dentifera, where infection prevalence peaked at ~ 40% of the population infected and host density declined precipitously during the outbreak. In controlled infections in the lab, lifespan and reproduction of infected hosts was lower than that of unexposed control hosts and of hosts that were exposed but not infected. We did not detect any significant changes in host resistance or parasite infectivity, nor did we find evidence for shifts in parasite virulence (quantified by host lifespan and number of clutches produced by hosts). However, over the epidemic, the parasite evolved to produce significantly fewer spores in infected hosts. While this finding was unexpected, it might reflect previously quantified tradeoffs: parasites in high mortality (e.g., high predation) environments shift from vegetative growth to spore production sooner in infections, reducing spore yield. Future studies that track evolution of parasite spore yield in more populations, and that link those changes with genetic changes and with predation rates, will yield better insight into the drivers of parasite evolution in the wild.