Abstract.-The idea that vertical transmission of parasites selects for lower virulence is widely accepted. However, little theoretical work has considered the evolution of virulence for parasites with mixed horizontal plus vertical transmission. Many human, animal, and plant parasites are transmitted both vertically and horizontally, and some horizontal transmission is generally necessary to maintain parasites at all. We present a population-dynamical model for the evolution of virulence when both vertical and horizontal transmission are present. In the simplest such model, up to two infectious strains can coexist within one host population. Virulent, vertically transmitted pathogens can persist in a population when they provide protection against more virulent, horizontally transmitted strains. When virulence is maintained by a correlation with horizontal transmission rates, increased levels of vertical transmission always lower the evolutionarily stable (ESS) level of virulence. Contrary to existing theory, however, increases in opportunities for horizontal transmission also lower the ESS level of virulence. We explain these findings in light of earlier work and confirm them in simulations including imperfect vertical transmission. We describe further simulations, in which both vertical and horizontal transmission rates are allowed to evolve. The outcome of these simulations depends on whether high levels of vertical transmission are possible with low virulence. Finally, we argue against the notion of a virulence-avirulence continuum between horizontal and vertical transmission, and discuss our results in relation to empirical studies of transmission and virulence.