Casitas, low-lying artificial shelters that mimic large crevices, are used in some fisheries for Caribbean spiny lobsters (Panulirus argus). These lobsters are highly gregarious and express communal defense of the shelter. Scaled-down casitas have been shown to increase survival, persistence, and foraging ranges of juveniles. Therefore, the use of casitas has been suggested to help enhance local populations of juvenile P. argus in Caribbean seagrass habitats, poor in natural crevice shelters, in marine protected areas. Following the emergence of Panulirus argus virus 1 (PaV1), which is lethal to juveniles of P. argus, concern was raised about the potential increase in PaV1 transmission with the use of casitas. It was then discovered that lobsters tend to avoid shelters harboring diseased conspecifics, a behavior which, alone or in conjunction with predatory culling of diseased lobsters, has been proposed as a mechanism reducing the spread of PaV1. However, this behavior may depend on the ecological context (i.e., availability of alternative shelter and immediacy of predation risk). We conducted an experiment in a lobster nursery area to examine the effect of the use of casitas on the dynamics of the PaV1 disease. We deployed 10 scaled-down casitas per site on five 1-ha sites over a reef lagoon (casita sites) and left five additional sites with no casitas (control sites). All sites were sampled 10 times every 3–4 months. Within each site, all lobsters found were counted, measured, and examined for clinical signs of the PaV1 disease. Mean density and size of lobsters significantly increased on casita sites relative to control sites, but overall prevalence levels remained similar. There was no relationship between lobster density and disease prevalence. Dispersion parameters (m and k of the negative binomial distribution) revealed that lobsters tended to avoid sharing natural crevices, but not casitas, with diseased conspecifics. These results confirm that casitas provide much needed shelter in seagrass habitats and that their large refuge area may allow distancing between healthy and diseased lobsters. On eight additional sampling times over two years, we culled all diseased lobsters observed on casita sites. During this period, disease prevalence did not decrease but rather increased and varied with site, suggesting that other factors (e.g., environmental) may be influencing the disease dynamics. Using scaled-down casitas in shelter-poor habitats may help efforts to enhance juvenile lobsters for conservation purposes, but monitoring PaV1 prevalence at least once a year during the first few years would be advisable.