A caste system in which females develop into morphologically distinct queens or workers has evolved independently in ants, wasps and bees. Although such reproductive division of labour may benefit the colony it is also a source of conflict because individual immature females can benefit from developing into a queen in order to gain greater direct reproduction. Here we present a formal inclusive fitness analysis of caste fate conflict appropriate for swarm-founding social Hymenoptera. Three major conclusions are reached: (1) when caste is self-determined, many females should selfishly choose to become queens and the resulting depletion of the workforce can substantially reduce colony productivity; (2) greater relatedness among colony members reduces this excess queen production; (3) if workers can prevent excess queen production at low cost by controlled feeding, a transition to nutritional caste determination should occur. These predictions generalize results derived earlier using an allele-frequency model [Behav. Ecol. Sociobiol. (2001) 50: 467] and are supported by observed levels of queen production in various taxa, especially stingless bees, where caste can be either individually or nutritionally controlled.