Spatially structured environments may impact evolution by restricting population sizes, limiting opportunities for genetic mixis, or weakening selection against deleterious genotypes. When habitat structure impedes dispersal, low-productivity (less virulent) infectious parasites may benefit from their prudent exploitation of local hosts. Here we explored the combined ability for habitat structure and host density to dictate the relative reproductive success of differentially productive parasites. To do so, we allowed two RNA bacteriophage Φ6 genotypes to compete in structured and unstructured (semi-solid versus liquid) habitats while manipulating the density of Pseudomonas hosts. In the unstructured habitats, the more-productive phage strain experienced a relatively constant fitness advantage regardless of starting host density. By contrast, in structured habitats, restricted phage dispersal may have magnified the importance of local productivity, thus allowing the relative fitness of the less-productive virus to improve as host density increased. Further data suggested that latent period (duration of cellular infection) and especially burst size (viral progeny produced per cell) were the phage “life-history” traits most responsible for our results. We discuss the relevance of our findings for selection occurring in natural phage populations and for the general evolutionary epidemiology of infectious parasites.