Manipulation of host phenotypes by parasites is hypothesized to be an adaptive strategy enhancing parasite transmission across hosts and generations. Characterizing the molecular mechanisms of manipulation is important to advance our understanding of host–parasite coevolution. The trematode (Levinseniella byrdi) is known to alter the colour and behaviour of its amphipod host (Orchestia grillus) presumably increasing predation of amphipods which enhances trematode transmission through its life cycle. We sampled 24 infected and 24 uninfected amphipods from a salt marsh in Massachusetts to perform differential gene expression analysis. In addition, we constructed novel genomic tools for O. grillus including a de novo genome and transcriptome. We discovered that trematode infection results in upregulation of amphipod transcripts associated with pigmentation and detection of external stimuli, and downregulation of multiple amphipod transcripts implicated in invertebrate immune responses, such as vacuolar ATPase genes. We hypothesize that suppression of immune genes and the altered expression of genes associated with coloration and behaviour may allow the trematode to persist in the amphipod and engage in further biochemical manipulation that promotes transmission. The genomic tools and transcriptomic analyses reported provide new opportunities to discover how parasites alter diverse pathways underlying host phenotypic changes in natural populations.