ABSTRACTAs polyphagous, holometabolous insects, tephritid fruit flies (Diptera: Tephritidae) provide a unique habitat for endosymbiotic bacteria, especially those microbes associated with the digestive system. Here we examine the endosymbiont of the olive fly [Bactrocera oleae(Rossi) (Diptera: Tephritidae)], a tephritid of great economic importance. “CandidatusErwinia dacicola” was found in the digestive systems of all life stages of wild olive flies from the southwestern United States. PCR and microscopy demonstrated that “Ca.Erwinia dacicola” resided intracellularly in the gastric ceca of the larval midgut but extracellularly in the lumen of the foregut and ovipositor diverticulum of adult flies. “Ca.Erwinia dacicola” is one of the few nonpathogenic endosymbionts that transitions between intracellular and extracellular lifestyles during specific stages of the host's life cycle. Another unique feature of the olive fly endosymbiont is that unlike obligate endosymbionts of monophagous insects, “Ca.Erwinia dacicola” has a G+C nucleotide composition similar to those of closely related plant-pathogenic and free-living bacteria. These two characteristics of “Ca.Erwinia dacicola,” the ability to transition between intracellular and extracellular lifestyles and a G+C nucleotide composition similar to those of free-living relatives, may facilitate survival in a changing environment during the development of a polyphagous, holometabolous host. We propose that insect-bacterial symbioses should be classified based on the environment that the host provides to the endosymbiont (the endosymbiont environment).