Social diversification in microbes is an evolutionary process where lineages bifurcate into distinct populations that cooperate with themselves but not with other groups. In bacteria, this is frequently driven by horizontal transfer of mobile genetic elements (MGEs). Here, the resulting acquisition of new genes changes the recipient’s social traits and consequently how they interact with kin. These changes include discriminating behaviors mediated by newly acquired effectors. Since the producing cell is protected by cognate immunity factors, these selfish elements benefit from selective discrimination against recent ancestors, thus facilitating their proliferation and benefiting the host. Whether social diversification benefits the population at large is less obvious. The widespread use of next-generation sequencing has recently provided new insights into population dynamics in natural habitats and the roles MGEs play. MGEs belong to accessory genomes, which often constitute the majority of the pangenome of a taxon, and contain most of the kin-discriminating loci that fuel rapid social diversification. We further discuss mechanisms of diversification and its consequences to populations and conclude with a case study involving myxobacteria.