Within-host competition is predicted to drive the evolution of virulence in parasites, but the precise outcomes of such interactions are often unpredictable due to many factors including the biology of the host and the parasite, stochastic events and co-evolutionary interactions. Here, we use a serial passage experiment (SPE) with three strains of a heterothallic fungal parasite (Ascosphaera apis) of the Honey bee (Apis mellifera) to assess how evolving under increasing competitive pressure affects parasite virulence and fitness evolution. The results show an increase in virulence after successive generations of selection and consequently faster production of spores. This faster sporulation, however, did not translate into more spores being produced during this longer window of sporulation; rather, it appeared to induce a loss of fitness in terms of total spore production. There was no evidence to suggest that a greater diversity of competing strains was a driver of this increased virulence and subsequent fitness cost, but rather that strain-specific competitive interactions influenced the evolutionary outcomes of mixed infections. It is possible that the parasite may have evolved to avoid competition with multiple strains because of its heterothallic mode of reproduction, which highlights the importance of understanding parasite biology when predicting disease dynamics.