Hereditary symbioses have the potential to drive transgenerational effects, yet the mechanisms responsible for transmission of heritable plant symbionts are still poorly understood. The leaf symbiosis between Dioscorea sansibarensis and the bacterium Orrella dioscoreae offers an appealing model system to study how heritable bacteria are transmitted to the next generation. Here, we demonstrate that inoculation of apical buds with a bacterial suspension is sufficient to colonize newly-formed leaves and propagules, and to ensure transmission to the next plant generation. Flagellar motility is not required for movement inside the plant, but is important for the colonization of new hosts. Further, stringent tissue-specific regulation of putative symbiotic functions highlight the presence of two distinct subpopulations of bacteria in the leaf gland and at the shoot meristem. We propose that bacteria in the leaf gland dedicate resources to symbiotic functions, while dividing bacteria in the shoot tip ensure successful colonization of meristematic tissue, glands and propagules. Compartmentalization of intra-host populations, together with tissue-specific regulation may serve as a robust mechanism for the maintenance of mutualism in leaf symbiosis. Importance Several plant species form associations with bacteria in their leaves, called leaf symbiosis. These associations are highly specific, but the mechanisms responsible for symbiont transmission are poorly understood. Using the association between the yam species Dioscorea sansibarensis and Orrella dioscoreae as a model leaf symbiosis, we provide experimental evidence that bacteria are transmitted vertically and distributed to specific leaf structures via association with shoot meristems. Flagellar motility is required for initial infection, but does not contribute to spread within host tissue. We also provide evidence that bacterial subpopulations at the meristem or in the symbiotic leaf gland differentially express key symbiotic genes. We argue that this separation of functional symbiont populations, coupled to tight control over bacterial infection and transmission, explain the evolutionary robustness of leaf symbiosis. These findings may provide insights into how plants may recruit and maintain beneficial symbionts at the leaf surface.