Directional selection for parasite resistance is often intense in highly social host species. Using a partial cross-fostering experiment we studied environmental and genetic variation in immune response and morphology in a highly colonial bird species, the house martin (Delichon urbica). We manipulated intensity of infestation of house martin nests by the haematophagous parasitic house martin bug Oeciacus hirundinis either by spraying nests with a weak pesticide or by inoculating them with 50 bugs. Parasitism significantly affected tarsus length, T cell response, immunoglobulin and leucocyte concentrations. We found evidence of strong environmental effects on nestling body mass, body condition, wing length and tarsus length, and evidence of significant additive genetic variance for wing length and haematocrit. We found significant environmental variance, but no significant additive genetic variance in immune response parameters such as T cell response to the antigenic phytohemagglutinin, immunoglobulins, and relative and absolute numbers of leucocytes. Environmental variances were generally greater than additive genetic variances, and the low heritabilities of phenotypic traits were mainly a consequence of large environmental variances and small additive genetic variances. Hence, highly social bird species such as the house martin, which are subject to intense selection by parasites, have a limited scope for immediate microevolutionary response to selection because of low heritabilities, but also a limited scope for long-term response to selection because evolvability as indicated by small additive genetic coefficients of variation is weak.