Aflatoxins produced by Aspergillus flavus are potent carcinogens that contaminate agricultural crops. Recent efforts to reduce aflatoxin concentrations in crops have focused on biological control using nonaflatoxigenic A. flavus strains AF36 (=NRRL 18543) and NRRL 21882 (the active component of afla-guard®). However, the evolutionary potential of these strains to remain nonaflatoxigenic in nature is unknown. To elucidate the underlying population processes that influence aflatoxigenicity, we examined patterns of linkage disequilibrium (LD) spanning 21 regions in the aflatoxin gene cluster of A. flavus. We show that recombination events are unevenly distributed across the cluster in A. flavus. Six distinct LD blocks separate late pathway genes aflE, aflM, aflN, aflG, aflL, aflI and aflO, and there is no discernable evidence of recombination among early pathway genes aflA, aflB, aflC, aflD, aflR and aflS. The discordance in phylogenies inferred for the aflW/aflX intergenic region and two noncluster regions, tryptophan synthase and acetamidase, is indicative of trans-species evolution in the cluster. Additionally, polymorphisms in aflW/aflX divide A. flavus strains into two distinct clades, each harbouring only one of the two approved biocontrol strains. The clade with AF36 includes both aflatoxigenic and nonaflatoxigenic strains, whereas the clade with NRRL 21882 comprises only nonaflatoxigenic strains and includes all strains of A. flavus missing the entire gene cluster or with partial gene clusters. Our detection of LD blocks in partial clusters indicates that recombination may have played an important role in cluster disassembly, and multilocus coalescent analyses of cluster and noncluster regions indicate lineage-specific gene loss in A. flavus. These results have important implications in assessing the stability of biocontrol strains in nature.