Some insects have cultivated intimate relationships with mutualistic bacteria since their early evolutionary history. Most ancient 'primary' endosymbionts live within the cytoplasm of large, polyploid host cells of a specialized organ (bacteriome). Within their large, ovoid bacteriomes, mealybugs (Pseudococcidae) package the intracellular endosymbionts into 'mucus-filled' spheres, which surround the host cell nucleus and occupy most of the cytoplasm. The genesis of symbiotic spheres has not been determined, and they are structurally unlike eukaryotic cell vesicles. Recent molecular phylogenetic and fluorescent in situ hybridization (FISH) studies suggested that two unrelated bacterial species may share individual host cells, and that bacteria within spheres comprise these two species. Here we show that mealybug host cells do indeed harbour both beta- and gamma-subdivision Proteobacteria, but they are not co-inhabitants of the spheres. Rather, we show that the symbiotic spheres themselves are beta-proteobacterial cells. Thus, gamma-Proteobacteria live symbiotically inside beta-Proteobacteria. This is the first report, to our knowledge, of an intracellular symbiosis involving two species of bacteria.