Coral growth depends on the partnership between the animal hosts and their intracellular, photosynthetic dinoflagellate symbionts. In this study, we used the sea anemone Aiptasia , a laboratory model for coral biology, to investigate the poorly understood mechanisms that mediate symbiosis establishment and maintenance. We found that initial colonization of both adult polyps and larvae by a compatible algal strain was more effective when the algae were able to photosynthesize and that the long-term maintenance of the symbiosis also depended on photosynthesis. In the dark, algal cells were taken up into host gastrodermal cells and not rapidly expelled, but they seemed unable to reproduce and thus were gradually lost. When we used confocal microscopy to examine the interaction of larvae with two algal strains that cannot establish stable symbioses with Aiptasia , it appeared that both pre- and post-phagocytosis mechanisms were involved. With one strain, algae entered the gastric cavity but appeared to be completely excluded from the gastrodermal cells. With the other strain, small numbers of algae entered the gastrodermal cells but appeared unable to proliferate there and were slowly lost upon further incubation. We also asked if the exclusion of either incompatible strain could result simply from their cells' being too large for the host cells to accommodate. However, the size distributions of the compatible and incompatible strains overlapped extensively. Moreover, examination of macerates confirmed earlier reports that individual gastrodermal cells could expand to accommodate multiple algal cells. This article is part of the theme issue ‘Sculpting the microbiome: how host factors determine and respond to microbial colonization’.