Understanding factors affecting the susceptibility of organisms to thermal stress is of enormous interest in light of our rapidly changing climate. When adaptation is limited, thermal acclimation and deacclimation abilities of organisms are critical for population persistence through a period of thermal stress. Holobionts (hosts plus associated symbionts) are key components of various ecosystems, such as coral reefs, yet the contributions of their two partners to holobiont thermal plasticity are poorly understood. Here, we tested thermal plasticity of the freshwater cnidarian Hydra viridissima (green hydra) using individual behavior and population responses. We found that algal presence initially reduced hydra thermal tolerance. Hydra with algae (symbiotic hydra) had comparable acclimation rates, deacclimation rates, and thermal tolerance after acclimation to those without algae (aposymbiotic hydra) but they had higher acclimation capacity. Acclimation of the host (hydra) and/or symbiont (algae) to elevated temperatures increased holobiont thermal tolerance and these effects persisted for multiple asexual generations. In addition, acclimated algae presence enhanced hydra fitness under prolonged sublethal thermal stress, especially when food was limited. Our study indicates while less intense but sublethal stress may favor symbiotic organisms by allowing them to acclimate, sudden large, potentially lethal fluctuations in climate stress likely favor aposymbiotic organisms. It also suggests that thermally stressed colonies of holobionts could disperse acclimated hosts and/or symbionts to other colonies, thereby reducing their vulnerability to climate change.