The bacterium Myxococcus xanthus glides through soil in search of prey microbes, but when food sources run out, cells cooperatively construct and sporulate within multicellular fruiting bodies. M. xanthus strains isolated from a 16 × 16-cm-scale patch of soil were previously shown to have diversified into many distinct compatibility types that are distinguished by the failure of swarming colonies to merge upon encounter. We sequenced the genomes of 22 isolates from this population belonging to the two most frequently occurring multilocus sequence type (MLST) clades to trace patterns of incipient genomic divergence, specifically related to social divergence. Although homologous recombination occurs frequently within the two MLST clades, we find an almost complete absence of recombination events between them. As the two clades are very closely related and live in sympatry, either ecological or genetic barriers must reduce genetic exchange between them. We find that the rate of change in the accessory genome is greater than the rate of amino-acid substitution in the core genome. We identify a large genomic tract that consistently differs between isolates that do not freely merge and therefore is a candidate region for harbouring gene(s) responsible for self/non-self discrimination.The ISME Journal advance online publication, 5 April 2016; doi:10.1038/ismej.2016.34.