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The formation of chimeric colonies following allogeneic contact between benthic invertebrates may strongly affect colony fitness. Here we show that, in a field population of the colonial ascidian Botryllus schlosseri in Monterey Bay, California, more than 20% of all colonies occur in allogeneic contact with conspecifics. We experimentally assessed the effects of allogeneic contact on the following life-history traits under natural field conditions: growth, age and size at first reproduction, and egg production (fecundity). When compared with isolated colonies, and in some cohorts also with colonies that rejected allogeneic neighbors, colonies that fused with neighbors incurred reduced fitness in terms of most life-history traits measured. We propose that one of the benefits of precise allorecognition is that, in fused colonies, it limits the unit of selection to chimeric individuals composed of closely related kin. [ABSTRACT FROM AUTHOR]