Parasites can have a profound effect on biology and evolution of the hosts, which are expected to have evolved physiological and developmental mechanisms that allow them to minimise the costs imposed by parasites. In this study we analyse the effects of a dipteran ectoparasite on barn swallow (Hirundo rustica) nestling biology including rate of somatic growth, plasma protein concentration, blood cell sedimentation rate, hematocrit, concentration of leukocytes in peripheral blood, and T-lymphocyte cell-mediated immunocompetence. In a natural population, intensity of parasite infestation was positively correlated with growth of feathers. Nestlings in heavily infested nests may decide to allocate more resources to feather growth thus fledging early. To test this hypothesis, the detrimental effects of parasites on nestlings, and the existence of trade-offs between competing growth processes, we inoculated some nests with additional flies. Nestlings exposed to increased infestation had larger rate of feather growth but were in poorer condition than unmanipulated controls. Parasite inoculation resulted in larger concentrations of eosinophils and lymphocytes. Among siblings of broods inoculated with parasites, those that had the largest rate of feather growth had the lowest rate of increase in tarsus length and body mass. We conclude that louse flies depress barn swallow nestling condition and influence their immune profile. However, they also enhance growth of a morphological character that may allow nestlings to reduce the impact of parasites. Nestlings apparently experience a trade-off between the competing demands for growing feathers and other somatic characters.