In most eukaryotes sexual reproduction generates a diploid zygote. However, in the majority of basidiomycete fungi, mating results in the production of a heterokaryotic zygote with cells containing the unfused nuclei of both gametes. Only immediately before meiosis and gamete formation is an actual diploid stage observed. The evolutionary consequences of maintaining multiple genetically distinct nuclei per cell include a plausible increase in phenotypic plasticity and the potential for genomic conflict to arise. Using the root rot pathogen Heterobasidion parviporum we found evidence for genomic conflict between the genetically distinct nuclei within a heterokaryotic strain. This conflict was evidenced by largely imbalanced ratios of the two component nuclei within the heterokaryotic mycelium. By placing heterokaryotic strains in various environments, we tested whether nuclear ratios could be modulated in a manner that would increase the fitness of the heterokaryon as a whole. Nuclear ratios were found to vary across environments, but did not change in a manner predicted if the heterokaryon can be considered as a population of nuclei, each the target of selection. These data show that heterokaryosis holds greater potential for phenotypic variability than diploidy but also creates an opportunity for genomic conflict to arise.