Despite the growing awareness that larval competition can influence adult mosquito life history traits including susceptibility to pathogens, the net effect of larval competition on human risk of exposure to mosquito-borne pathogens remains poorly understood. We examined how intraspecific larval competition affects dengue-2 virus (DENV-2) extrinsic incubation period and vectorial capacity of its natural vector Aedes albopictus. Adult Ae. albopictus from low and high-larval density conditions were orally challenged with DENV-2 and then assayed for virus infection and dissemination rates following a 6, 9, or 12-day incubation period using real-time quantitative reverse transcription PCR. We then modeled the effect of larval competition on vectorial capacity using parameter estimates obtained from peer-reviewed field and laboratory studies. Larval competition resulted in significantly longer development times, lower emergence rates, and smaller adults, but did not significantly affect the extrinsic incubation period of DENV-2 in Ae. albopictus. Our vectorial capacity models suggest that the effect of larval competition on adult mosquito longevity likely has a greater influence on vectorial capacity relative to any competition-induced changes in vector competence. Furthermore, we found that large increases in the viral dissemination rate may be necessary to compensate for small competition-induced reductions in daily survivorship. Our results indicate that mosquito populations that experience stress from larval competition are likely to have a reduced vectorial capacity, even when susceptibility to pathogens is enhanced.