Host-parasite coevolution is predicted to have complex evolutionary consequences, potentially leading to the emergence of genetic and phenotypic diversity for both antagonists. However, little is known about variation in phenotypic responses to coevolution between different parasite strains exposed to the same experimental conditions. We infected Caenorhabditis elegans with one of two strains of Bacillus thuringiensis and either allowed the host and the parasite to experimentally coevolve (coevolution treatment) or allowed only the parasite to adapt to the host (one-sided parasite adaptation). By isolating single parasite clones from evolved populations, we found phenotypic diversification of the ancestral strain into distinct clones, which varied in virulence toward ancestral hosts and competitive ability against other parasite genotypes. Parasite phenotypes differed remarkably not only between the two strains, but also between and within different replicate populations, indicating diversification of the clonal population caused by selection. This study highlights that the evolutionary selection pressure mediated by a multicellular host causes phenotypic diversification, but not necessarily with the same phenotypic outcome for different parasite strains.