Bacterial cells in their native environments must cope with factors that compromise the integrity of the cell. The mechanisms of coping with damage in a social or multicellular context are poorly understood. Here we investigated how a model social bacterium, Myxococcus xanthus, approaches this problem. We focused on the social behavior of outer membrane exchange (OME), in which cells transiently fuse and exchange their outer membrane (OM) contents. This behavior requires TraA, a homophilic cell surface receptor that identifies kin based on similarities in a polymorphic region, and the TraB cohort protein. As observed by electron microscopy, TraAB overexpression catalyzed a prefusion OM junction between cells. We then showed that damage sustained by the OM of one population was repaired by OME with a healthy population. Specifically, LPS mutants that were defective in motility and sporulation were rescued by OME with healthy donors. In addition, a mutant with a conditional lethal mutation in lpxC, an essential gene required for lipid A biosynthesis, was rescued by Tra-dependent interactions with a healthy population. Furthermore, lpxC cells with damaged OMs, which were more susceptible to antibiotics, had resistance conferred to them by OME with healthy donors. We also show that OME has beneficial fitness consequences to all cells. Here, in merged populations of damaged and healthy cells, OME catalyzed a dilution of OM damage, increasing developmental sporulation outcomes of the combined population by allowing it to reach a threshold density. We propose that OME is a mechanism that myxobacteria use to overcome cell damage and to transition to a multicellular organism.