Anagyrus sp. nov. nr. sinope Noyes & Menezes (Hymenoptera: Encyrtidae) is a gregarious, koinobiont parasitoid of the Madeira mealybug, Phenacoccus madeirensis Green (Hemiptera: Pseudococcidae). We investigated effects of larval competition on development, survival, and progeny body size of the parasitoid over a range of brood sizes and sex ratios. We recorded the brood size, sex ratio, and fitness parameters of parasitoids developing from second instars and adult P. madeirensis. Adult mealybugs as hosts produce larger brood and progeny body sizes and more female progeny. Second instar P. madeirensis continued to develop after parasitism, and mummies achieved a more advanced developmental stage yielding parasitoid cohorts of larger brood and body sizes, female-biased sex ratio, and longer developmental time than mummies formed from younger host instars. Overall, the sexual composition within a brood had little or no effect on the development, survival and body size of the parasitoid progeny developing from second instar and adult mealybugs. Larval competition among brood-mates developing in adult mealybugs caused a reduction in the progeny tibial length with increasing brood sizes. In contrast, parasitoids developing from second instar mealybugs had a longer developmental time and little (although positive) or no response in the progeny tibial length to increasing brood size. We hypothesize that the continuous development of second instar mealybugs allows the hosts to accumulate additional resources, thus, reducing competition among parasitoid brood mates for limited resources. The continuous development of hosts of younger developmental stages after parasitism may have the potential to alter the direction and intensity of larval competition of the koinobiont gregarious parasitoid.