Parasite-driven population divergence in hosts can be exacerbated by environmental factors affecting host parasitism, as well as by increasing sexual selection against parasitized hosts. Environmental factors can influence parasitism directly by affecting parasite survival, and indirectly by affecting host condition, which can in turn shape host sexual selection. To disentangle these potential alternative paths, we used a damselfly (host)water mite (parasite) system to examine how environmental factors directly and indirectly drive heterogeneity in parasitism across populations and influence the strength of sexual selection acting against parasitized males. We found substantial heterogeneity in parasitism across populations, driven mainly by lake pH, and damselfly density. Although this heterogeneity in parasitism did not translate directly into variation in sexual selection, the density of predatory fish increased sexual selection strength, likely through the effects on damselfly condition. These results imply that parasitism alone may not cause differences in sexual selection across populations, but when linked with underlying environmental conditions, parasitism can increase the strength of selection. More broadly, these results suggest that elucidating how parasitism may drive sexual selection requires consideration of the intwined effects of ecological processes.