Parasites exploit hosts to replicate and transmit, but overexploitation kills both host and parasite: parasite virulence evolves to balance these costs and benefits. Predators can in theory shift this balance by consuming hosts. However, the non-consumptive effects of predators may be as important as their consumptive effects. Here, we use an eco-coevolutionary model to show that predators select for host grouping, a common anti-predator, defensive social behaviour. Host grouping simultaneously increases parasite transmission, thus within-host parasite competition, and therefore favours more exploitative, virulent, parasites. When parametrized with data from the guppy-Gyrodactylus spp. system, including our experimentally demonstrated trade-off between virulence and transmission, our model accurately predicted the common garden-assayed virulence of 18 parasite lines collected from four Trinidadian guppy populations under different predation regimes. The quantitative match between theory and data lends credence to the model insight that the non-consumptive, social behaviour pathway is entirely responsible for the observed increase in virulence with predation pressure. Our results indicate that parasites play an important, underappreciated role in guppy evolutionary ecology. Moreover, group living is a common anti-predator defence and our general model accommodates host-parasite interactions across taxa: its insight into the interactions among predation, sociality, and virulence evolution may apply broadly. Our results additionally suggest that social distancing, by reducing host-host contact, can select for less virulent parasites and pathogens.