In many natural populations, hosts are found to be infected by more than one parasite species. When these parasites have different host exploitation strategies and transmission modes, a conflict among them may arise. Such a conflict may reduce the success of both parasites, but could work to the benefit of the host. For example, the less-virulent parasite may protect the host against the more-virulent competitor. We examine this conflict using the waterflea Daphnia magna and two of its sympatric parasites: the blood-infecting bacterium Pasteuria ramosa that transmits horizontally and the intracellular microsporidium Octosporea bayeri that can concurrently transmit horizontally and vertically after infecting ovaries and fat tissues of the host. We quantified host and parasite fitness after exposing Daphnia to one or both parasites, both simultaneously and sequentially. Under conditions of strict horizontal transmission, Pasteuria competitively excluded Octosporea in both simultaneous and sequential double infections, regardless of the order of exposure. Host lifespan, host reproduction and parasite spore production in double infections resembled those of single infection by Pasteuria. When hosts became first vertically (transovarilly) infected with O. bayeri, Octosporea was able to withstand competition with P. ramosa to some degree, but both parasites produced less transmission stages than they did in single infections. At the same time, the host suffered from reduced fecundity and longevity. Our study demonstrates that even when competing parasite species utilize different host tissues to proliferate, double infections lead to the expression of higher virulence and ultimately may select for higher virulence. Furthermore, we found no evidence that the less-virulent and vertically transmitting O. bayeri protects its host against the highly virulent P. ramosa.