Most mechanisms proposed to protect mutualistic species interactions against invasion by non-cooperative individuals imply that mutualist populations should consist only of fully cooperative individuals. Empirical studies, however, find widespread genetic variation in mutualist quality. One explanation for this paradox is that mutualisms are mediated not only by assessment of partner quality, but also by partner signaling. Here, we examine a model of host-symbiont coevolution in which one locus determines host recognition of compatible symbionts, and a second locus determines whether hosts are able to sanction non-cooperative symbionts; and Symbionts' expression of signals and cooperation in mutualism are similarly determined by separate loci. This model maintains variation in both species, even as mutualism persists. Individual-based simulations incorporating population structure show that the dual-system model also promotes greater geographic variation in symbiont quality. The dual systems of sanctions and partner recognition also converge toward conditions similar to recently-developed models of symbiosis in which hosts offering the right incentives to potential symbionts can initiate symbiosis without screening for partner quality. Our results suggest that a full understanding of mutualistic symbiosis requires integration of communication between partner species as well as the exchange of benefits.