The coevolution between hosts and parasites is predicted to have complex evolutionary consequences for both antagonists, often within short time periods. To date, conclusive experimental support for the predictions is available mainly for microbial host systems, but for only a few multicellular host taxa. We here introduce a model system of experimental coevolution that consists of the multicellular nematode host Caenorhabditis elegans and the microbial parasite Bacillus thuringiensis. We demonstrate that 48 host generations of experimental coevolution under controlled laboratory conditions led to multiple changes in both parasite and host. These changes included increases in the traits of direct relevance to the interaction such as parasite virulence (i.e., host killing rate) and host resistance (i.e., the ability to survive pathogens). Importantly, our results provide evidence of reciprocal effects for several other central predictions of the coevolutionary dynamics, including (i) possible adaptation costs (i.e., reductions in traits related to the reproductive rate, measured in the absence of the antagonist), (ii) rapid genetic changes, and (iii) an overall increase in genetic diversity across time. Possible underlying mechanisms for the genetic effects were found to include increased rates of genetic exchange in the parasite and elevated mutation rates in the host. Taken together, our data provide comprehensive experimental evidence of the consequences of host-parasite coevolution, and thus emphasize the pace and complexity of reciprocal adaptations associated with these antagonistic interactions.