Theory identifies factors that can undermine the evolutionary stability of mutualisms. However, theory's relevance to mutualism stability in nature is controversial. Detailed comparative studies of parasitic species that are embedded within otherwise mutualistic taxa (e.g., fig pollinator wasps) can identify factors that potentially promote or undermine mutualism stability. We describe results from behavioral, morphological, phylogenetic, and experimental studies of two functionally distinct, but closely related, Eupristina wasp species associated with the monoecious host fig, Ficus microcarpa, in Yunnan Province, China. One (Eupristina verticillata) is a competent pollinator exhibiting morphologies and behaviors consistent with observed seed production. The other (Eupristina sp.) lacks these traits, and dramatically reduces both female and male reproductive success of its host. Furthermore, observations and experiments indicate that individuals of this parasitic species exhibit greater relative fitness than the pollinators, in both indirect competition (individual wasps in separate fig inflorescences) and direct competition (wasps of both species within the same fig). Moreover, phylogenetic analyses suggest that these two Eupristina species are sister taxa. By the strictest definition, the nonpollinating species represents a "cheater" that has descended from a beneficial pollinating mutualist. In sharp contrast to all 15 existing studies of actively pollinated figs and their wasps, the local F. microcarpa exhibit no evidence for host sanctions that effectively reduce the relative fitness of wasps that do not pollinate. We suggest that the lack of sanctions in the local hosts promotes the loss of specialized morphologies and behaviors crucial for pollination and, thereby, the evolution of cheating.