Although purely vertically transmitted parasites are predicted to cause low pathogenicity in their hosts, the effects of such parasites on host fitness under stressful environmental conditions have not previously been assessed. Here, we investigate the effects of Nosema granulosis, a vertically transmitted, microsporidian parasite of the brackish water amphipod Gammarus duebeni, on host growth and survival under conditions of host–host competition and limited food. The parasite had no effect on host survival, but caused a reduction in juvenile growth. Stressful environmental conditions also led to a reduction in G. duebeni growth. However, we found no evidence to support the prediction that parasitized hosts would suffer a greater reduction in fitness than uninfected hosts under adverse environmental conditions. We interpret our results in the context of selection for successful vertical parasite transmission.