Bacteriocytes set the stage for some of the most intimate interactions between animal and bacterial cells. In all bacteriocyte possessing systems studied so far, de novo formation of bacteriocytes occurs only once in the host development, at the time of symbiosis establishment. Here, we present the free-living symbiotic flatworm Paracatenula galateia and its intracellular, sulfur-oxidizing bacteria as a system with previously undescribed strategies of bacteriocyte formation and bacterial symbiont transmission. Using thymidine analogue S-phase labeling and immunohistochemistry, we show that all somatic cells in adult worms – including bacteriocytes – originate exclusively from aposymbiotic stem cells (neoblasts). The continued bacteriocyte formation from aposymbiotic stem cells in adult animals represents a previously undescribed strategy of symbiosis maintenance and makes P. galateia a unique system to study bacteriocyte differentiation and development. We also provide morphological and immunohistochemical evidence that P. galateia reproduces by asexual fragmentation and regeneration (paratomy) and, thereby, vertically transmits numerous symbiont-containing bacteriocytes to its asexual progeny. Our data support the earlier reported hypothesis that the symbiont population is subjected to reduced bottleneck effects. This would justify both the codiversification between Paracatenula hosts and their Candidatus Riegeria symbionts, and the slow evolutionary rates observed for several symbiont genes.