It is unclear how mutualistic relationships can be stable when partners disperse freely and have the possibility of forming associations with many alternative genotypes. Theory predicts that high symbiont relatedness should resolve this problem, but the mechanisms to enforce this have rarely been studied. We show that African fungus-growing termites propagate single variants of their Termitomyces symbiont, despite initiating cultures from genetically variable spores from the habitat. High inoculation density in the substrate followed by fusion among clonally related mycelia enhances the efficiency of spore production in proportion to strain frequency. This positive reinforcement results in an exclusive lifetime association of each host colony with a single fungal symbiont and hinders the evolution of cheating. Our findings explain why vertical symbiont transmission in fungus-growing termites is rare and evolutionarily derived.