A major focus of research on the dynamics of host-pathogen interactions has been the evolution of pathogen virulence, which is defined as the loss in host fitness due to infection. It is usually assumed that changes in pathogen virulence are the result of selection to increase pathogen fitness. However, in some cases, pathogens have acquired hypovirulence by themselves becoming infected with hyperparasites. For example, the chestnut blight fungus Cryphonectria parasitica has become hypovirulent in some areas by acquiring a double-stranded RNA hyperparasite that debilitates the pathogen, thereby reducing its virulence to the host. In this article, we develop and analyze a mathematical model of the dynamics of host-pathogen interactions with three trophic levels. The system may be dominated by either uninfected (virulent) or hyperparasitized (hypovirulent) pathogens, or by a mixture of the two. Hypovirulence may allow some recovery of the host population, but it can also harm the host population if the hyperparasite moves the transmission rate of the pathogen closer to its evolutionarily stable strategy. In the latter case, the hyperparasite is effectively a mutualist of the pathogen. Selection among hyperparasites will often minimize the deleterious effects, or maximize the beneficial effects, of the hyperparasite on the pathogen. Increasing the frequency of multiple infections of the same host individual promotes the acquisition of hypovirulence by increasing the opportunity for horizontal transmission of the hyperparasite. This effect opposes the usual theoretical expectation that multiple infections promote the evolution of more virulent pathogens via selection for rapid growth within hosts.