Cooperation between species is regularly observed in nature, but understanding of what promotes, maintains and strengthens these relationships is limited. We used a phylogenetically controlled design to investigate one potential driver in reef-building corals: variation in symbiont transmission mode. Two of three species pairs conformed to theoretical predictions stating that vertical transmission (VT) should maximize whole-organism fitness. Montipora aequituburculata (VT) exhibited greater net photosynthetic function, calcification rate and bleaching tolerance than its horizontally transmitting (HT) sister taxa Acropora millepora. Similar performance was observed in Porites lobata (VT) and Goniopora columna (HT), with the VT species showing higher fitness. However, Galaxea archelia (VT) was consistently out-performed by its HT congener G. astreata. Cooperation, quantified with radioisotope tracing of carbon sharing, was more variable across pairs, perhaps reflecting different optimization strategies necessary to maximize holobiont fitness. Variation in fitness patterns between VT and HT corals was not explained by differences in Symbiodinium communities among species; however, reproductive mode may play a role as both M. aequituburculata and P. lobata transmit symbionts transovarially whereas G. archelia broods larvae. Taken together, transmission mode may be an important driver of symbiosis evolution in some corals, but additional evolutionary mechanisms should be investigated.