In situations where populations of related host species grow sympatrically but isolated from other populations of either host, cross-species disease transmission can have large influences on disease dynamic and patterns of pathogen persistence. This study examined host–pathogen dynamics and the degree of host-specificity in the anther-smut fungus Microbotryum violaceum at a site where two of its host species, Lychnis alpina and Silene rupestris, grew in adjacent patches which were located at large distances from the nearest intra-specific host and pathogen populations. In a field-study carried out over a four-year period in the sympatric populations, the two host species exhibited broadly parallel patterns of mortality and recruitment across years, although higher rates of mortality and infection, and larger fluctuations in numbers of plants, were seen in the S. rupestris population. However, when the frequency of disease in the populations was taken into account, disease transmission rates were relatively similar in the two hosts. In a reciprocal cross-inoculation experiment, there were no differences in infectivity between the two fungal populations on progeny of the two hosts from the sympatric populations indicating that cross-species disease transmission is possible. Patterns of infectivity on plants from the sympatric populations and allopatric populations of each host indicated the occurrence of a host shift in M. violaceum from L. alpina onto S. rupestris at the sympatric site. Results from a population model, parameterised with the demographic data from the two hosts, demonstrated that some cross-species disease transmission could increase the frequency of disease and lower the threshold level of pathogen persistence in populations. The population model also suggests that high levels of juvenile infection, as observed in both hosts, may increase the probability of pathogen persistence in local populations, especially in the more short-lived S. rupestris.