Avian hosts may either resist the negative effects of nestling ectoparasites by minimizing the number of parasites, or tolerate parasitism by increasing their fecundity via the reproductive compensation hypothesis. Little is known about the interactions between ectoparasites and their avian hosts in the tropics. We (1) examined nestling development rates, and tested whether (2) parasitism by a subcutaneous ectoparasitic botfly (Philornis sp.) had negative effects on the condition of nestlings, and (3) these negative effects were minimized in larger broods in a tropical cavity-nesting bird, the planalto woodcreeper (Dendrocolaptes platyrostris), in primary and secondary Atlantic forests in the northern province of Misiones, Argentina. Nestling mass and ectoparasite load per nestling reached maxima when nestlings (n = 50) were between 10 and 14 d old. General linear mixed models predicted that mass at fledging declined with increasing nestling parasite load, suggesting that botflies had a negative influence on fledging condition. Parasite load per nestling declined with increasing brood size indicating that woodcreepers that increase their reproductive output minimize the negative effects of parasitism. Overall we found evidence to support the tolerance via reproductive compensation hypothesis. Future tests of the reproductive compensation hypothesis may help determine the underlying mechanism of the observed negative correlation between parasite load of nestlings and brood size.