Abstract Symbiotic rhizobia differentiate physiologically and morphologically into nitrogen-fixing bacteroids inside legume host nodules. The differentiation is apparently terminal in some legume species, such as peas (Pisum sativum) and peanuts (Arachis hypogaea), likely due to extreme cell swelling induced by the host. In other legume species, such as beans (Phaseolus vulgaris) and cowpeas (Vigna unguiculata), differentiation into bacteroids, which are similar in size and shape to free-living rhizobia, is reversible. Bacteroid modification by plants may affect the effectiveness of the symbiosis. Here, we compare symbiotic efficiency of rhizobia in two different hosts where the rhizobia differentiate into swollen nonreproductive bacteroids in one host and remain nonswollen and reproductive in the other. Two such dual-host strains were tested: Rhizobium leguminosarum A34 in peas and beans and Bradyrhizobium sp. 32H1 in peanuts and cowpeas. In both comparisons, swollen bacteroids conferred more net host benefit by two measures: return on nodule construction cost (plant growth per gram nodule growth) and nitrogen fixation efficiency (H2 production by nitrogenase per CO2 respired). Terminal bacteroid differentiation among legume species has evolved independently multiple times, perhaps due to the increased host fitness benefits observed in this study.