We evaluated the relationship between blood parasites and body condition of American Kestrels (Falco sparverius) during the breeding season. Females that were infected with at least one species of parasite were in poorer condition than those without parasites during incubation but not prior to egg laying. We suggest that the relationship between parasitism and condition was masked before laying because of large increases in body mass of females during egg formation. Reduced condition of males during incubation also was associated with higher intensity of infections by Haemoproteus in one of two years. The negative association between condition and intensity of infection suggests that blood parasites impose costs on kestrels owing to competition for nutrients or allocation of energy by hosts to immune function or tissue repair. Alternatively, kestrels in poor condition may be more likely to have relapses of chronic infections, or they may be less able to control new infections because of resource limitations. In contrast to results during incubation, during the prelaying period the prevalence of parasites tended to be higher, and in one year infections were more intense, among males in good condition. One possible explanation for these results is that body condition of males during courtship is an important determinant of the quality of mate they are able to obtain, and males may be accumulating body reserves at the expense of decreased immune function. Return rates of female kestrels to the study area declined as the intensity of their Haemoproteus infections increased, suggesting that blood parasitism is associated with reduced survival or increased dispersal probability.