Hybridization between closely related species often leads to reduced viability or fertility of offspring. Complete failure of hybrid offspring (post-zygotic hybrid incompatibilities) may have an important role in maintaining the integrity of reproductive barriers between closely related species. We show elsewhere that in Peron's tree frog, Litoria peronii, males more closely related to a female sire more offspring in sperm competition with a less related rival male. Observations of rare 'phenotypic intermediate' males between L. peronii and the closely related L. tyleri made us suggest that these relatedness effects on siring success may be because of selection arising from risks of costly hybridization between the two species. Here, we test this hypothesis in an extensive sperm competition experiment, which shows that there is no effect of species identity on probability of fertilization in sperm competition trials controlling for sperm concentration and sperm viability. Instead, there was a close agreement between a male's siring success in isolation with a female and his siring success with the same female in competition with a rival male regardless of species identity. Offspring viability and survival, however, were strongly influenced by species identity. Over a 14-day period, hybrid offspring suffered increasing mortality and developed more malformations and an obvious inability to swim and right themselves, leading to compromised probability of survival. Thus, hybridization in these sympatric tree frogs does not compromise fertilization but has a strong impact on offspring viability and opportunity for reinforcement selection on mate choice for conspecific partners.