Many insects, other arthropods, and nematodes harbor maternally inherited bacteria inducing “cytoplasmic incompatibility” (CI), reduced egg hatch when infected males mate with uninfected females. Although CI drives the spread of these microbes, selection on alternative, mutually compatible strains in panmictic host populations does not act directly on CI intensity but favors higher “effective fecundity,” the number of infected progeny an infected female produces. We analyze the consequences of host population subdivision using deterministic and stochastic models. In subdivided populations, effective fecundity remains the primary target of selection. For strains of equal effective fecundity, if population density is regulated locally (i.e., “soft selection”), variation among patches in infection frequencies may induce change in the relative frequencies of the strains. However, whether this change favors stronger incompatibility depends on initial frequencies. Demographic fluctuations maintain frequency variation that tends to favor stronger incompatibility. However, this effect is weak; even with small patches, minute increases in effective fecundity can offset substantial decreases in CI intensity. These results are insensitive to many details of host life cycle and migration and to systematic outbreeding or inbreeding within patches. Selection acting through transfer between host species may be required to explain the prevalence of CI.