A parasite might be prohibited from investing simultaneously in horizontal (infection of new hosts) and vertical (infection of the current host's offspring) transmission because of developmental, physiological, or evolutionary costs and constraints. Rather, these constraints may select for adaptive phenotypic plasticity, where the parasite uses the transmission pathway that maximizes transmission in the current ecological and epidemiological conditions. By varying environmental conditions for the host's replication, we investigated the plasticity of vertical and horizontal transmission of Holospora undulata, a micronucleus-specific bacterial parasite of the protozoan Paramecium caudatum. We observed a negative correlation between the host's growth rate and the parasite's investment in horizontal transmission. In rapidly dividing hosts, the parasite remained in the reproductive stage and was passed on vertically to the daughter nuclei during mitotic division of the Paramecium. In contrast, at low or negative growth rates of the host, the parasite's reproductive forms differentiated into infectious forms, the agents of horizontal transmission. Furthermore, in treatments that were initiated with a high proportion of individuals harboring horizontally transmitted infectious forms, rapid replication resulted in a switch back from predominantly horizontal to almost exclusively vertical transmission. These results suggest a trade-off between the efficacies of vertical and horizontal transmission, with the parasite switching to horizontal transmission only if conditions for host replication, and thus vertical transmission, deteriorate.