Xenorhabdus nematophila bacteria are mutualists of Steinernema carpocapsae nematodes and pathogens of insects. Xenorhabdus nematophila exhibits phenotypic variation between insect virulence (V) and the mutualistic (M) support of nematode reproduction and colonization initiation in the infective juvenile (IJ) stage nematode that carries X. nematophila between insect hosts. The V and M phenotypes occur reciprocally depending on levels of the transcription factor Lrp: high-Lrp expressors are M+V- while low-Lrp expressors are V+M-. We report here that variable (wild type) or fixed high-Lrp expressors also are optimized, relative to low- or no-Lrp expressors, for colonization of additional nematode stages: juvenile, adult and pre-transmission infective juvenile (IJ). In contrast, we found that after the bacterial population had undergone outgrowth in mature IJs, the advantage for colonization shifted to low-Lrp expressors: fixed low-Lrp expressors (M-V+) and wild type (M+V+) exhibited higher average bacterial CFU per IJ than did high-Lrp (M+V-) or no-Lrp (M-V-) strains. Further, the bacterial population becomes increasingly low-Lrp expressing, based on expression of an Lrp-dependent fluorescent reporter, as IJs age. These data support a model that virulent X. nematophila have a selective advantage and accumulate in aging IJs in advance of exposure to insect hosts in which this phenotype is necessary.