This study assessed the effect of parasitism of Nephus includens (Col: Coccinellidae) larvae by Homalotylus flaminius (Hym.: Encyrtidae) on the predation rates of the predator on the cotton aphid, Aphis gossypii Glover (Hem.: Aphididae) by deriving functional responses for secondand fourth-instar predators at prey densities ranging from 10 to 80 aphids per arena. The relationship between the functional and numerical responses of adult females of N. includens also was determined for prey densities ranging from 10 to 140 aphids per arena. Predation rates of unparasitized and parasitized second-instar N. includens were both fit by a type II functional response model with parameters as follows: unparasitized (a = 0.0768 hours^-1 and T_h = 0.975 h) and parasitized (a = 0.0787 hours^-1 and T_h = 0.8823 hours). Predation rates of unparasitized and parasitized fourth-instar N. includens were fit by type III and II models, respectively, with the following parameters: unparasitized (b = 0.1702 hours^-1 and T_h = 0.2369 hours) and parasitized (a = 0.038 h^-1 and T_h = 0.539 h). The unparasitized fourth-instar was the most voracious stage, having the highest attack rate and lowest handling time. Considering these attributes, it would seem to be the most effective stage of this predator against A. gossypii. Adult female lady beetles (N. includens) showed a type III functional response and their numerical response increase to prey density was curvilinearly related to prey density, with the highest number of eggs being produced at highest prey densities. The maximum saturation level for both predation and egg production for adult females occurred at a prey density of 120 aphids. Thus, a ratio 1:120 (predator:prey) should be used when releasing this species for augmentative biological control. Release of either fourth-instar or adult stage N. includens should be minimized the potentially negative effect of parasitism by H. flaminius on early developmental stages, and hence increase its efficiency in biocontrol programs.