ABSTRACT Avian biodiversity declines are increasingly linked to invasive parasites threatening local bird populations that lack evolved defenses. The level of virulence in these interactions, in turn, influences the parasites' own fitness and drives co‐evolutionary dynamics. Studying newly established host–parasite systems can shed light on adaptive processes and associated behavioral and ecological aspects. The invasive parasitic fly Philornis downsi , unintentionally introduced to the Galapagos Islands, severely threatens native bird species, including endemic Darwin's finches. Over the past decades, P. downsi infestation rates have increased, shortening nestling survival and limiting larval development. Furthermore, an earlier shift in oviposition timing has been documented, with female flies infesting incubated host nests, despite P. downsi having previously been classified as an obligate nestling parasite. In this study, we investigated the hypothesis that intraspecific competition, shaped by host density and parasite infestation patterns, drives oviposition during the incubation of bird eggs in P. downsi . Host density, interacting with mean infestation intensity of simultaneously active nests, positively influenced oviposition during host incubation, and long‐term data identified the proportion of infested nests (prevalence) as a key driver. When mean infestation intensity was low, higher host density increased per‐nestling infestation and reduced larval survival, suggesting clustered nests attract more flies. In contrast, under high mean infestation intensity, greater host density led to lower per‐nestling infestation and higher larval survival. Our findings suggest high fly competition drives the earlier shift in the parasite's life cycle, while associated trade‐offs or potential adaptive strategies may explain the observed decrease in per‐nestling infestation intensity. Moreover, oviposition during host incubation was not observed in mainland Ecuador, the native range of the ancestral P. downsi population. Despite higher Philornis species diversity, reduced competition in mainland Ecuador contrasts with high infestation rates in Galapagos, indicating rapid behavioral divergence due to increased competition in the latter location.