The composition of cooperative systems, including animal societies, organismal bodies, and microbial groups, reflects their past and shapes their future evolution. However, genomic diversity within many multiunit systems remains uncharacterized, limiting our ability to understand and compare their evolutionary character. We have analyzed genomic and social-phenotype variation among 120 natural isolates of the cooperative bacterium Myxococcus xanthus derived from six multicellular fruiting bodies. Each fruiting body was composed of multiple lineages radiating from a unique recent ancestor. Genomic evolution was concentrated in selection hotspots associated with evolutionary change in social phenotypes. Synonymous mutations indicated that kin lineages within the same fruiting body often first diverged from a common ancestor more than 100 generations ago. Thus, selection appears to promote endemic diversification of kin lineages that remain together over long histories of local interaction, thereby potentiating social coevolution. Copyright © 2019 The Authors, some rights reserved; exclusive licensee American Association for the Advancement of Science. No claim to original U.S. Government Works.