The multi-billion dollar asset attributed to symbiotic nitrogen fixation is often threatened by the nodulation of legumes by rhizobia that are ineffective or poorly effective in N(2) fixation. This study investigated the development of rhizobial diversity for the pasture legume Biserrula pelecinus L., 6 years after its introduction, and inoculation with Mesorhizobium ciceri bv. biserrulae strain WSM1271, to Western Australia. Molecular fingerprinting of 88 nodule isolates indicated seven were distinctive. Two of these were ineffective while five were poorly effective in N(2) fixation on B. pelecinus. Three novel isolates had wider host ranges for nodulation than WSM1271, and four had distinct carbon utilization patterns. Novel isolates were identified as Mesorhizobium sp. using 16S rRNA, dnaK and GSII phylogenies. In a second study, a large number of nodules were collected from commercially grown B. pelecinus from a broader geographical area. These plants were originally inoculated with M. c bv. biserrulae WSM1497 5-6 years prior to isolation of strains for this study. Nearly 50% of isolates from these nodules had distinct molecular fingerprints. At two sites diverse strains dominated nodule occupancy indicating recently evolved strains are highly competitive. All isolates tested were less effective and six were ineffective in N(2) fixation. Twelve randomly selected diverse isolates clustered together, based on dnaK sequences, within Mesorhizobium and distantly to M. c bv. biserrulae. All 12 had identical sequences for the symbiosis island insertion region with WSM1497. This study shows the rapid evolution of competitive, yet suboptimal strains for N(2) fixation on B. pelecinus following the lateral transfer of a symbiosis island from inoculants to other soil bacteria.