Alternative transmission strategies are common in many parasitic organisms, often representing discrete phenotypes adopted in response to external cues. The facultative truncation of the normal 3-host life-cycle to a 2-host cycle in many trematodes provides an example: some individuals mature precociously, via progenesis, in their intermediate host and produce eggs without the need to reach a definitive host. The factors that determine how many and which individuals adopt the truncated life-cycle within a parasite population remain unknown. We investigated the occurrence of progenesis in the trematode Stegodexamene anguillae within its fish intermediate host. Location within the host was a key determinant of progenesis. Although the size and egg output of progenetic metacercariae encysted in host gonads did not differ from those of the few progenetic metacercariae in other host tissues, the likelihood of metacercariae becoming progenetic was much higher for those in the gonads than those elsewhere in the host. Progenetic parasites can only evacuate their eggs along with host eggs or sperm, providing a link between the parasite's transmission strategy and its location in the host. Host size and sex, and the presence of other parasite species in the host, did not affect the occurrence of progenesis in S. anguillae. However, the proportion of metacercariae in host gonads and the proportion of progenetic metacercariae both decreased with increasing numbers of S. anguillae per host. These results suggest that progenesis is adopted mostly by the parasites that successfully establish in host gonads. These are generally the first to infect a fish; subsequent arrivals settle in other tissues as the gonads quickly become saturated with parasites. In this system, the site of encystment within the fish host both promotes and constrains the adoption of a facultative, truncated life-cycle by the parasite.