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Abstract Certain mycophagous Drosophila species are the only known eukaryotes that can tolerate some highly potent mycotoxins. This association between mycophagy and mycotoxin tolerance is well established because Drosophila species that switch hosts from mushrooms to other food sources lose their mycotoxin tolerance trait without any evolutionary lag. These findings suggest that mycotoxin tolerance may be a costly trait to maintain. In this study, we attempted to identify whether mycotoxin tolerance has a fitness cost. Larval competitive ability is a vital fitness trait, especially in holometabolous insects, where the larvae cannot move to a new host. Furthermore, larval competitive ability is known to be associated with many critical life-history traits. Here we studied whether mycotoxin tolerance adversely affects larval competitive ability on isofemale lines from 2 distinct locations. We observed that the extent of mycotoxin tolerance affected larval competitive ability, but only in isofemale lines from one location. Additionally, we observed that the high mycotoxin-tolerant isofemale lines from the same location showed poor survival to eclosion. This study shows that mycotoxin tolerance is associated with fitness costs and provides preliminary evidence of an association between local adaptation and mycotoxin tolerance.