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Abstract Due to their non-motile nature, plants rely heavily on mutualistic interactions to obtain resources and carry out services. One key mutualism is the plant–microbial mutualism in which a plant trades away carbon to a microbial partner for nutrients like nitrogen and phosphorous. Plants show much variation in the use of this partnership from the individual level to entire lineages depending upon ecological, evolutionary and environmental context. We sought to determine how this context dependency could result in the promotion, exclusion or coexistence of the microbial mutualism by asking if and when the partnership provided a competitive advantage to the plant. To that end, we created a 2 × 2 evolutionary game in which plants could either be a mutualist and pair with a microbe or be a non-mutualist and forgo the partnership. Our model includes both frequency dependence and density dependence, which gives us the eco-evolutionary dynamics of mutualism evolution. As in all models, mutualism only evolved if it could offer a competitive advantage and its net benefit was positive. However, surprisingly the model reveals the possibility of coexistence between mutualist and non-mutualist genotypes due to competition between mutualists over the microbially obtained nutrient. Specifically, frequency dependence of host strategies can make the microbial symbiont less beneficial if the microbially derived resources are shared, a phenomenon that increasingly reduces the frequency of mutualism as the density of competitors increases. In essence, ecological competition can act as a hindrance to mutualism evolution. We go on to discuss basic experiments that can be done to test and falsify our hypotheses.