Natural transformation in the Gram-positive pathogen Streptococcus pneumoniae occurs when cells become "competent", a state that is induced in response to high extracellular concentrations of a secreted peptide signal called CSP (Competence Stimulating Peptide) encoded by the comC locus. Two main CSP signal types (pherotypes) are known to dominate the pherotype diversity across strains. Using thousands of fully sequenced pneumococcal genomes, we confirm that pneumococcal populations are highly genetically structured and that there is significant variation among diverged populations in pherotype frequencies; most carry only a single pherotype. Moreover, we find that the relative frequencies of the two dominant pherotypes significantly vary within a small range across geographical sites. It has been variously proposed that pherotypes either promote genetic exchange among cells expressing the same pherotype, or conversely that they promote recombination between strains bearing different pherotypes. We distinguish these hypotheses using a bioinformatics approach by estimating recombination frequencies within and between pherotypes across 4,089 full genomes. Despite underlying population structure, we observe extensive recombination between populations; additionally, we found significantly higher rates of genetic exchange between strains expressing different pherotypes than among isolates carrying the same pherotype. Our results indicate that pherotypes do not restrict, and marginally facilitate, recombination between strains. Furthermore, our results suggest that the CSP balanced polymorphism does not causally underlie population differentiation. Therefore, when strains carrying different pherotypes encounter one another during co- colonization, genetic exchange can freely occur.