While past work has often examined the effects of transmission mode on virulence evolution in parasites, few studies have explored the impact of horizontal transmission on the evolution of benefits conferred by a symbiont to its host. Here, we identify three mechanisms that create a positive covariance between horizontal transmission and symbiont-provided benefits: pleiotropy within the symbiont genome, partner choice by the host, and consumption of host waste by-products by symbionts. We modify a susceptible-infected model to incorporate the details of each mechanism and examine the evolution of symbiont benefits given variation in either the immigration rate of susceptible hosts or the rate of successful vertical transmission. We find conditions for each case under which greater opportunity for horizontal transmission (higher migration rate) favors the evolution of mutualism. Further, we find the surprising result that vertical transmission can inhibit the evolution of benefits provided by symbionts to hosts when horizontal transmission and symbiont-provided benefits are positively correlated. These predictions may apply to a number of natural systems, and the results may explain why many mutualisms that rely on partner choice often lack a mechanism for vertical transmission.