Resistant malaria parasites are frequently found in mixed infections with drug-sensitive parasites. Particularly early in the evolutionary process, the frequency of these resistant mutants is extremely low and below the level of molecular detection. We tested whether the rarity of resistance in infections impacted the health outcomes of treatment failure and the potential for onward transmission of resistance. Mixed infections of different ratios of resistant and susceptible Plasmodium chabaudi parasites were inoculated in laboratory mice and dynamics tracked during the course of infection using highly sensitive genotype-specific quantitative polymerase chain reaction (qPCR). Frequencies of resistant parasites ranged from 10% to 0.003% at the onset of treatment. We found that the rarer the resistant parasites were, the lower the likelihood of their onward transmission, but the worse the treatment failure was in terms of parasite numbers and disease severity. Strikingly, drug resistant parasites had the biggest impact on health outcomes when they were too rare to be detected by any molecular methods currently available for field samples. Indeed, in the field, these treatment failures would not even have been attributed to resistance.