The present study assessed the role of polychaetes as a potential carrier for transmission of Enterocytozoon hepatopenaei (EHP) in shrimp. The PCR based screening of wild polychaete samples (n = 330) along three coastal states of India revealed EHP in 7.6%, white spot syndrome virus (WSSV) in 8.5% and co-infection of WSSV and EHP in 3.6% samples. Out of 7.6% (n = 25), polychaetes tested positive for EHP by nested PCR assay, 2.1% were I step PCR positive (severe infections) and 5.5% nested step positive (light infections). About 75% of the EHP-positive polychaete samples originated from the sites surrounding or adjacent to shrimp farming areas. Phylogenetic analysis showed that EHP isolates from polychaetes clustered into a single group together with that from India and other countries. Challenge experiments using naïve polychaetes fed with faecal samples of EHP-infected shrimp became positive for EHP in 100% worms at 15 days. However, evidence on replication of EHP in polychaete tissues by histological studies is insufficient to confirm intracellular development. Similarly, EHP-positive polychaetes fed to naïve shrimp transmitted the infection to detectable levels by PCR within a week. The EHP-positive gravid worms did not transmit the microsporidian parasite to their progeny (fertilised eggs or different larval stages). The EHP has the potential to persist in wild polychaetes as long as the worms inhabit contaminated soil sediments. It could therefore be concluded that the polychaetes were apparently capable of carrying infectious spores for some period after ingestion of EHP-contaminated feed or soil sediments. The results support the popular view that use of wild-caught polychaetes as live-feed to shrimp broodstock can increase the risk of passive or mechanical transmission of EHP leading to contamination risk in hatcheries. The present work appears to be the first study involving experimental infection and transmission of E. hepatopenaei between shrimp and polychaetes, in either direction i.e., from shrimp to polychaetes and vice versa.