Summary: Understanding the variation in hereditary symbiont frequency among host populations is a prerequisite to predict symbiont fixation processes. However, the mechanisms driving this variation remain elusive. Exploring the mechanisms responsible for the observed variability on an ecological time scale requires simultaneous study of fitness differentials between symbiotic (S) and non‐symbiotic (NS) hosts, and the symbiont transmission rates to host offspring. We studied these two key mechanisms using a grass–endophyte symbiosis in the alpine grass Festuca eskia. Plants from four native populations varying in endophyte frequencies (ranging from 13% to 100%), and environmental conditions (water availability, and grazing pressure) were transplanted in a common garden. Soil nutrient levels were manipulated to assess genetic and environmental differences within and among populations in fitness‐related traits (i.e. traits linked to clonal growth, sexual reproduction and resource acquisition). A fitness differential favouring S over NS plants was detected in all studied populations: in heavily grazed populations, sexual reproduction was higher in S compared with NS plants, whereas in minimally grazed populations, clonal growth increased. Results showed a positive correlation between endophyte transmission rates and population endophyte symbiotic frequencies. The population endophyte transmission rates were not affected by soil resource level. According to selection pressures acting in each population, symbiotic plants appear to perform better in all F. eskia populations. The correlation between endophyte frequencies and transmission, and the positive effect of S on NS plants under our experimental conditions, indicated a predominant role of endophyte transmission in endophyte frequency variation in F. eskia. The endophyte transmission rate variation is genetically based at the population level and can be explained by a trade‐off with a specific host trait subjected to strong selection; here, we suspected traits linked to plant resource acquisition. Synthesis: Our study provides evidence for the (i) dominant role of endophyte transmission and its responsibility for endophyte frequency variation in a native grass when compared with fitness differential process between S and NS plants at an ecological time scale, and (ii) genetically based variation in endophyte transmission rates. We also confirm the population specificity of positive endophyte effects in a native grass.