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Mixed infections are thought to have a major influence on the evolution of parasite virulence. During a mixed infection, higher within-host parasite growth is favored under the assumption that it is critical to the competitive success of the parasite. As within-host parasite growth may also increase damage to the host, a positive correlation is predicted between virulence and competitive success. However, when parasites must kill their hosts in order be transmitted, parasites may spend energy on directly attacking their host, even at the cost of their within-host growth. In such systems, a negative correlation between virulence and competitive success may arise. We examined virulence and competitive ability in three sympatric species of obligately killing nematode parasites in the genus Steinernema. These nematodes exist in a mutualistic symbiosis with bacteria in the genus Xenorhabdus. Together the nematodes and their bacteria kill the insect host soon after infection, with reproduction of both species occurring mainly after host death. We found significant differences among the three nematode species in the speed of host killing. The nematode species with the lowest and highest levels of virulence were associated with the same species of Xenorhabdus, indicating that nematode traits, rather than the bacterial symbionts, may be responsible for the differences in virulence. In mixed infections, host mortality rate closely matched that associated with the more virulent species, and the more virulent species was found to be exclusively transmitted from the majority of coinfected hosts. Thus, despite the requirement of rapid host death, virulence appears to be positively correlated with competitive success in this system. These findings support a mechanistic link between parasite growth and both anti-competitor and anti-host factors.