A central issue in ecology is in understanding the relative influences of intrinsic and extrinsic effects on population regulation. Previous studies on the cyclic population dynamics of red grouse (Lagopus lagopus scoticus) have emphasized the destabilizing effects of either nematode parasites or territorial behaviour and aggression. The potential interacting effects of these processes, mediated through density-dependent, environmentally induced alterations of host immunocompetence influencing susceptibility to parasites have not been considered. Male red grouse at high density are more aggressive, associated with increased testosterone, which potentially could lead to reduced immunocompetence at a stage when parasites are most prevalent. This could depress individual condition, breeding performance and survival and thus drive or contribute to overall reductions in population size. Here, we characterize the transcriptomic response of grouse to nematode parasite infection and investigate how this is subsequently affected by testosterone, using a microarray approach contrasting red grouse with high and low parasite load at both high and low testosterone titre. A suite of 52 transcripts showed a significant level of up-regulation to either chronic parasite load or experimental parasite infection. Of these, 51 (98%) showed a reduced level of expression under conditions of high parasite load and high testosterone. The genes up-regulated by parasites and then down-regulated at high testosterone titre were not necessarily associated with immune response, as might be intuitively expected. The results are discussed in relation to the fitness and condition of individual red grouse and factors influencing the regulation of abundance in natural populations.