Pathogens that infect multiple hosts are commonly transmitted by vectors, and their transmission rate is often thought to depend on the proportion of hosts or vectors infected (i.e., frequency dependence). A model of a two-host, one-pathogen system with frequency-dependent transmission is used to investigate how sharing a pathogen with an alternative host influences pathogen-mediated extinction. The results show that if there is frequency-dependent transmission, a host can be rescued from pathogen-mediated extinction by the presence of a second host with which it shares a pathogen. The study provides an important conceptual counterexample to the idea that shared pathogens necessarily result in apparent competition by showing that shared pathogens can mediate apparent mutualism. We distinguish two types of dilution effect (pathogen reduction with increasing host diversity), each resulting from different underlying pathogen transmission processes and host density effects. These results have important consequences for understanding the role of pathogens in species interactions and in maintaining host species diversity.