Theoretical and practical difficulties occur when defining the units of selection in modular organisms that grow by iteration of repeated parts (modules). Modules may become physically autonomous through fragmentation and may vary because of genetic variation arising in somatic cell lineages. Since cells destined for gamete production are not sequestered in early development, heritable variation and selection among asexual progeny are possible. We used the branching red macroalgae Delisea pulchra and Asparagopsis armata to test whether modules fulfill three fundamental criteria for units of selection: that they replicate, that they display heritable variation, and that selective agents distinguish among the variants. We detected significant phenotypic variation among modules for fitness‐related traits (growth, secondary metabolite concentrations, and rates of tissue loss to herbivory) in each species and significant heritability estimates for secondary metabolite production and tissue loss to herbivory in D. pulchra. Variation in growth rate among A. armata modules was largely phenotypic with small but important estimates of genetic variation. Our results indicate that selection may indeed act on phenotypic variation among modules within individuals and that this process may effect evolutionary change within asexual lineages given sufficient genetic variation in the traits examined.