AbstractBacteria that form long-term intracellular associations with host cells lose many genes, a process that often results in tiny, gene-dense, and stable genomes. Paradoxically, the some of the same evolutionary processes that drive genome reduction and simplification may also cause genome expansion and complexification. A bacterial endosymbiont of cicadas,Hodgkinia cicadicola, exemplifies this paradox. In many cicada species, a singleHodgkinialineage with a tiny, gene-dense genome has split into several interdependent cell and genome lineages. Each newHodgkinialineage encodes a unique subset of the ancestral unsplit genome in a complementary way, such that the collective gene contents of all lineages match the total found in the ancestral single genome. This splitting creates genetically distinctHodgkiniacells that must function together to carry out basic cellular processes. It also creates a gene dosage problem where some genes are encoded by only a small fraction of cells while others are much more abundant. Here, by sequencing DNA and RNA ofHodgkiniafrom different cicada species with different amounts of splitting—along with its structurally stable, unsplit partner endosymbiontSulcia muelleri—we show thatHodgkiniadoes not transcriptionally compensate to rescue the wildly unbalanced gene and genome ratios that result from lineage splitting. We also find thatHodgkiniahas a reduced capacity for basic transcriptional control independent of the splitting process. Our findings reveal another layer of degeneration further pushing the limits of canonical molecular and cell biology inHodgkiniaand may partially explain its propensity to go extinct through symbiont replacement.