Semiochemicals from insects that restrict plant symbiont dinitrogen fixation had not been known. Here we report on a the glycosylated triketide delta-lactone only found in Nephrotoma cornicina crane flies, cornicinine, that causes chlorosis in the floating-fern symbioses from the genus Azolla. Cornicinine was chemically synthesized, as well as its aglycone and diastereoisomer. Only the glycosylated trans-A form was active: 500 nM cornicinine in the growth medium turned the dinitrogen-fixing cyanobacterial filaments from Nostoc azollae inside the host leaf cavities into akinete-like cells. Cornicinine further inhibited akinete germination in Azolla sporelings, precluding re-establishment of the symbiosis during sexual reproduction. It did not affect the plant Arabidopsis thaliana or several free-living cyanobacteria from the genera Anabaena or Nostoc. Chlorosis occurred in hosts on nitrogen with and devoid of cyanobiont. Cornicinine, therefore, targeted host mechanisms resulting in coordinate cyanobiont differentiation. Sequence profiling of messenger RNA from isolated leaf cavities confirmed high NH4-assimilation and proanthocyanidin biosynthesis in this trichome-rich tissue. Leaf-cavity transcripts in ferns grown on cornicinine reflected activation of Cullin-RING ubiquitin-ligase pathways, known to mediate metabolite signaling and plant elicitation consistent with the chlorosis phenotype. Transcripts accumulating when akinetes are induced, in leaf cavities of ferns on cornicinine and in megasporocarps, were consistent with increased JA-oxidase, sulfate transport and exosome formation. The work begins to uncover molecular mechanisms of cyanobiont differentiation in a seed-free plant symbiosis important for wetland ecology or circular crop-production today, that once caused massive CO2 draw-down during the Eocene geological past.