Pathogen outbreaks in the wild can contribute to a population's extinction risk. Concern over the effects of pathogen outbreaks in wildlife is amplified in small, threatened populations, where degradation of genetic diversity may hinder natural selection for enhanced immunocompetence. Beak and feather disease virus (BFDV) was detected for the first time in an island population of red-crowned parakeets (Cyanoramphus novaezelandiae) in 2008 on Little Barrier Island (Hauturu-o-Toi) of New Zealand. By 2013, the prevalence of the viral infection had significantly decreased within the population. We tested whether the population of red-crowned parakeets showed a selective response to BFDV, using neutral microsatellite and two immunity-associated genetic markers, the major histocompatibility complex (MHC) and Toll-like receptors (TLRs). We found evidence for selection at viral-associated TLR3; however, the ability of TLR3 to elicit an immune response in the presence of BFDV warrants confirmation. Alternatively, because red-crowned parakeet populations are prone to fluctuations in size, the decrease in BFDV prevalence over time may be attributed to the Little Barrier Island population dropping below the density threshold for viral maintenance. Our results highlight that natural processes such as adaptation for enhanced immunocompetence and/or density fluctuations are efficient mechanisms for reducing pathogen prevalence in a threatened, isolated population.