Life-history theory predicts that sexually reproducing organisms have evolved to resolve resource-allocation trade-offs between growth/survival versus reproduction, and current versus future reproduction. Malaria parasites replicate asexually in their vertebrate hosts, but must reproduce sexually to infect vectors and be transmitted to new hosts. As different specialized stages are required for these functions, the division of resources between these life-history components is a fundamental evolutionary problem. Here, we test how drug-sensitive and drug-resistant isolates of the human malaria parasite Plasmodium falciparum resolve the trade-off between in-host replication and between-host transmission when exposed to treatment with anti-malarial drugs. Previous studies have shown that parasites increase their investment in sexual stages when exposed to stressful conditions, such as drugs. However, we demonstrate that sensitive parasites facultatively decrease their investment in sexual stages when exposed to drugs. In contrast to previous studies, we tested parasites from a region where treatment with anti-malarial drugs is common and transmission is seasonal. We hypothesize that when exposed to drugs, parasites invest in their survival and future transmission by diverting resources from reproduction to replication. Furthermore, as drug-resistant parasites did not adjust their investment when exposed to drugs, we suggest that parasites respond to changes in their proliferation (state) rather the presence of drugs.