The Type VII secretion system (T7SS) is found in many Gram-positive firmicutes and secretes protein toxins that mediate bacterial antagonism. Two T7SS toxins have been identified in Staphylococcus aureus, EsaD a nuclease toxin that is counteracted by the EsaG immunity protein, and TspA, which has membrane depolarising activity and is neutralised by TsaI. Both toxins are polymorphic, and strings of non-identical esaG and tsaI immunity genes are encoded in all S. aureus strains. During genome sequence analysis of closely related S. aureus strains we noted that there had been a deletion of six consecutive esaG copies in one lineage. To investigate this further, we analysed the sequences of the tandem esaG genes and their encoded proteins. We identified three blocks of high sequence homology shared by all esaG genes, and identified evidence of extensive recombination events between esaG paralogues facilitated through these conserved sequence blocks. Recombination between these blocks accounts for loss of esaG genes from S. aureus genomes. TipC, an immunity protein for the TelC lipid II phosphatase toxin secreted by the streptococcal T7SS, is also encoded by multiple gene paralogues. Two blocks of high sequence homology locate to the 5-prime and 3-prime end of tipC genes, and we found strong evidence for recombination between tipC paralogues encoded by Streptococcus mitis BCC08. By contrast, we found only a single block of homology across tsaI genes, and little evidence for intergenic recombination within this gene family. We conclude that homologous recombination is one of the drivers for the evolution of T7SS immunity gene clusters.