Models of host–parasitoid dynamics often assume constant levels of spatial heterogeneity in parasitoid attack rate, which tends to stabilize the interactions. Recently, authors have questioned this assumption and shown that outcomes of simple host–parasitoid models change if spatial heterogeneity is allowed to vary with parasitoid density. Here, we allow spatial heterogeneity to vary with either parasitoid density or percent parasitism in a model designed to explain specialist parasitoid coexistence on insect hosts with various levels of refuge. By examining this model we can evaluate the effect of varying spatial heterogeneity on a more complex model in which spatial heterogeneity is not considered the primary determinant of persistence. By modeling communities with one host and two parasitoid species, we show that the probability of species persistence for the competitively inferior parasitoid depends on the assumed relationship between spatial heterogeneity and both parasitoid density and percent parasitism. The probability of parasitoid coexistence is generally lower when spatial heterogeneity varies with parasitoid demographics. We conclude that the conditions for which host refuge promote specialist parasitoid coexistence are less common that proposed by the original model. Finally, we compared a model in which spatial heterogeneity varies with percent parasitism to data from laboratory trials and find a reasonable fit. We conclude that the change in spatial heterogeneity strongly influenced the outcome of the laboratory trials, and we suggest more research is necessary before researchers can assume constant spatial heterogeneity in future models.