With the rise in species invasions and emerging infectious diseases, pathogen spillover from abundant reservoir hosts to their competitors is increasingly common. Although the potential for pathogen spillover is widespread, its consequences for host community composition remain poorly understood. To address this gap, I examine the consequences of fungal seed pathogen spillover from an exotic annual grass (cheatgrass) to a native perennial bunchgrass in the Intermountain West, United States, using a model. Integrating generalist pathogens with broader coexistence theory, the model measures the pathogen's effect on host niche differences and fitness differences, which determine the outcome of competition. The model demonstrates that the consequences of pathogen spillover depend on host differences in species-specific transmission and disease tolerance. Counterintuitively, spillover can lead to coexistence, native grass exclusion, or priority effects, in which either species can exclude the other when initially more dominant. Cheatgrass has higher tolerance for infection, which could lead to competitive dominance or to coexistence if the native grass has a fecundity or survival advantage. In sum, multihost pathogens can affect host communities in a range of ways, depending on the specific mechanism of spillover.