Many host species interact with a specific parasite within only a fraction of their geographical range. Where host and parasite overlap geographically, selection may be reciprocal constituting a coevolutionary hot spot. Host evolution, however, may be driven primarily by selection imposed by alternative biotic or abiotic factors that occur outside such hot spots. To evaluate the importance of coevolutionary hot spots for host and parasite evolution, we analyse a spatially explicit genetic model for a host that overlaps with a parasite in only part of its geographical range. Our results show that there is a critical amount of overlap beyond which reciprocal selection leads to a coevolutionary response in the host. This critical amount of overlap depends upon the explicit spatial configuration of hot spots. When the amount of overlap exceeds this first critical level, host-parasite coevolution commonly generates stable allele frequency clines rather than oscillations. It is within this region that one of the primary predictions of the geographic mosaic theory is realized, and local maladaptation is prevalent in both species. Past a further threshold of overlap between the species oscillations do evolve, but allele frequencies in both species are spatially synchronous and local maladaptation is absent in both species. A consequence of such transitions between coevolutionary dynamics is that parasite adaptation is inversely proportional to the fraction of its host's range that it occupies. Hence, as the geographical range of a parasite increases, it becomes increasingly maladapted to the host. This suggests a novel mechanism through which the geographical range of parasites may be limited.