Insects are subject to attack from a range of natural enemies. Many natural enemies, such as parasitoids, do not immediately, or ever, kill their victims but they are nevertheless important in structuring biological communities. The lag that often occurs between attack and host death results in mixed populations of healthy and parasitised hosts. However, little is understood about how the effects of parasitism during this lag period affect the competitive ability of parasitised hosts and how this, in turn, affects the survival and dynamics of the surviving healthy host populations. Here we investigate the impact of the timing of introduction, and the strength of that introduction, of a parasitoid natural enemy Venturia canescens (Gravenhorst) on the outcome of intraspecific competition between larvae of the Indian meal moth, Plodia interpunctella (Hübner). In contrast to healthy hosts alone, we find reduced survival of healthy larvae with increasing periods of exposure to greater numbers of parasitised conspecifics. This represents indirect mortality of the host, which is in addition to that imposed by parasitism itself. Furthermore, longer periods of exposure to parasitised larvae resulted in an increase in development time of healthy individuals and they were larger when they emerged as adults. These results are relevant to both insect–parasitoid and insect–pathogen systems where there is a lag in host death following infection or attack.