Conjugative plasmids of Gram-negative bacteria have both vertical and horizontal modes of transmission: they are segregated to daughter cells during division, and transferred between hosts by plasmid-encoded conjugative machinery. Despite maintaining horizontal mobility, many plasmids carry fertility inhibition (fin) systems that repress their own conjugative transfer. To assess the ecological basis of self-transfer repression, we compared the invasion of bacterial populations by fin(+) and fin(-) variants of the plasmid R1 using a computational model and co-culture competitions. We observed that the fin(+) variant had a modest cost to the host (measured by reduction in growth rate), while the fin(-) variant incurred a larger cost. In simulations and empirical competitions the fin(-) plasmid invaded cultures quickly, but was subsequently displaced by the fin(+) plasmid. This indicated a competitive advantage to reducing horizontal transmission and allowing increased host replication. Computational simulations predicted that the advantage associated with reduced cost to the host would be maintained over a wide range of environmental conditions and plasmid costs. We infer that vertical transmission in concert with competitive exclusion favour decreased horizontal mobility of plasmids. Similar dynamics may exert evolutionary pressure on parasites, such as temperate bacteriophages and vertically transmitted animal viruses, to limit their rates of horizontal transfer.