|Zooxanthellae in coral polyps |
Zooxanthellae are endosymbionts that are best known for giving coral reefs their vibrant colors. Coral reefs are calcareous structures that support a wide diversity of marine flora and fauna. It is a “marriage” of convenience for both parties involved: a great example of mutualism. They live exclusively in scleractinian coral species, reef building corals.
Warm waters and light limit coral reefs. Thus, the corals are generally found in tropical shallow waters. Coral reefs exist in the Caribbean, the Indian Ocean, and the tropical Pacific. In addition, where one finds corals, one finds zooxanthellae as well.  However, some of the zooxanthellae are host specific.
Coral Life Cycle
Corals exist as an adult polyp which undergoes sexual reproduction through the release of gametes to form the zygote. The zygote then enters the free swimming state called the planula larva stage, which settle on a substrate and develop into a poly and restarts the cycle.  The adult polyp are of a tubular shape with a gastrovascular cavity and a ring of tentacles. An individual polyp secretes a skeleton called corallite and is composed of calcium carbonate in the form of aragonite. 
Zooxanthellae Life Cycle
Zooxanthellae begin as an immature cyst which turns into a mature cyst that divides. After division it evolves into the zoosporangium. After which, the zoosporangium enters a free-swimming form called the zoospore. From here gametes develop and released upon maturation, and the cycle begins again. 
A Relationship of Old
Zooxanthellae are a type of dinoflagellate belonging to the genus Symbiodinium while reef building corals belong to the phylum Cnidaria, class Anthazoa, subclass Hexacorallia, and order Scleractinia. Originally scleractinian corals were not reef building corals and preferred the solitary existence. However, about 230 million years ago in the Triassic period a symbiotic relationship was established between zooxanthellae and scleractinian corals.  The corals can acquire the zooxanthellae by ingestion in their larval stage. However, they can be acquired by vertical transmission from the parent.
Reasons to Stay Married
The relationship is that of an obligate mutualism. Without the zooxanthellae corals cannot form reefs. Both parties benefit from the association. The zooxanthellae provides glycerol, glucose, alanine, and oxygen to the coral polyp. In addition, it facilitates the deposition of calcium carbonate which is needed to from the skeleton, as well as removing carbon dioxide and nitrogenous wastes. Meanwhile the polyp provides nutrients to the zooxanthellae in the form of nitrogen and phosphorous and UV protection. In the polyp the zooxanthellae finds a home and protection from predation. 
Every relationship comes with a few restrictions. The zooxanthellae are the reason for corals being limited to the euphotic zone since zooxanthellae can only live at certain temperatures and light depth. In return the growth of the zooxanthellae is limited within the coral in order to maintain a balance of nutrient flow. When the coral is unable to control the division of zooxanthellae, carbon is diverted to the zooxanthellae instead of the coral, leading to the expulsion of the zooxanthellae. This causes the coral to lose all color, leading to a bleaching effect. 
It’s All About Staying Alive
According to Combes, mutualism is a form of reciprocal slavery and in this case that is very much true. At the end of the day, it comes down to tradeoffs: geographic limitations in exchange for the ability to form reefs, nutrients, and enhanced growth in the case of the coral reef, while zooxanthellae obtains food, shelter, and protection in exchanged for a more limited reproductive rate. In this way, they both enslave the other. At the end of the day, the benefits outnumber the cost of living separate and it becomes a case of “Live together or die alone.”
 Smith, Alan. “Coral Physiology.” Powerpoint presentation. February 2011.
 Steele, R. D. (1975). Stages in the life history of symbiotic zooxanthellae in pellets extruded by its host Aiptasia tagetes (Duch. and Mich.) (Coelenterata, Anthazoa). Biol. Bull. 149:590-600. Retrieved from
 Woodridge, S. A. (2010). "Is the coral-algae symbiosis really mutually beneficial for the partners?".
BioEssays 32 (7): 615–625. Retrieved from http://onlinelibrary.wiley.com/doi/10.1002/bies.200900182/pdf