Parasitism is believed to play an important role in maintaining species diversity, for instance by facilitating coexistence between competing host species. However, the possibility that environmental factors may govern the outcome of parasite-mediated competition has rarely been considered. The closely related amphipods Corophium volutator and Corophium arenarium both serve as second intermediate host for detrimental trematodes. Corophium volutator is the superior competitor of the two, but also suffers from higher mortality when exposed to infective trematode stages. Here, we report parasite-mediated competitive release of C. arenarium in an intertidal habitat, in part triggered by unusually high temperatures linked to the North Atlantic climate oscillation (NAO). The elevated temperatures accelerated the transmission of cercariae from sympatric first intermediate hosts (mud snails) to amphipods, causing a local collapse of the parasite-sensitive C. volutator population and concordant increase in the abundance of the competitively inferior C. arenarium.