Competition for mating territories in libellulid dragonflies involves aerial contests that require high levels of exertion and locomotor performance. Here we test the hypothesis that success of male Libellula pulchella dragonflies in territoriality and mating is affected by muscle contractile performance, and we examine how gregarine gut parasites affect muscle performance, energy reserves and territorial behaviour of their hosts. At a pond where gregarine parasites are rare, long-term territorial and mating success of males showed a significant positive association with muscle power output. At a nearby pond that had a much higher incidence and intensity of gregarine parasitism, there was no relationship between muscle performance and short-term territorial success. Instead, males assorted themselves into aggressive territory holders and submissive satellites, with the large majority of territory holders having no parasites and nearly all of the satellites parasitized. Unparasitized males showed a tight positive relationship between muscle power and fat content, which suggests that they use a known phenotypic adjustment in muscle contractile performance to allow the energy consumption rate of the flight muscles to match the rate at which energy can be mobilized from storage pools. Parasitized dragonflies showed a small decrease in average fat content and a marked change in the relationship between fat content and muscle power output. The apparent loss of the ability to match muscle contractility to the size of the energy storage pool in parasitized dragonflies suggests that gregarines may have systemic effects on signalling pathways and energy homeostasis. By indirectly choosing males that had successfully competed for territories, females consistently mated with physiologically or immunologically superior males despite large between-pond differences in male behaviour and the incidence and intensity of parasitic infection.