There is a large body of theoretical studies that investigate factors that affect the evolution of virulence, that is parasite-induced host mortality. In these studies the host population is assumed to be genetically homogeneous. However, many parasites have a broad range of host types they infect, and trade-offs between the parasite virulence in different host types may exist. The aim of this paper is to study the effect of host heterogeneity on the evolution of parasite virulence. By analyzing a simple model that describes the replication of different parasite strains in a population of two different host types, we determine the optimal level of virulence in both host types and find the conditions under which strains that specialize in one host type dominate the parasite population. Furthermore, we show that intrahost evolution of the parasite during an infection may lead to stable polymorphisms and could introduce evolutionary branching in the parasite population.