Spatial structure within microbial communities can provide nearly limitless opportunities for social interactions and are an important driver for evolution. As metabolites are often molecular signals, metabolite diffusion within microbial communities can affect the composition and dynamics of the community in a manner that can be challenging to deconstruct. We used encapsulation of a synthetic microbial community within microdroplets to investigate the effects of spatial structure and metabolite diffusion on population dynamics and to examine the effects of cheating by one member of the community. The synthetic community was composed of three strains: a “Producer” that makes the diffusible quorum sensing molecule (N-(3-oxododecanoyl)-l-homoserine lactone, C12-oxo-HSL) or AHL; a “Receiver” that is killed by AHL; and a Non-Producer or “cheater” that benefits from the extinction of the Receivers, but without the costs associated with the AHL synthesis. We demonstrate that despite rapid diffusion of AHL between microdroplets, the spatial structure imposed by the microdroplets allows a more efficient but transient enrichment of more rare and slower-growing Producer subpopulations. Eventually, the Non-Producer population drove the Producers to extinction. By including fluorescence-activated microdroplet sorting and providing sustained competition by the Receiver strain, we demonstrate a strategy for indirect enrichment of a rare and unlabeled Producer. The ability to screen and enrich metabolite Producers from a much larger population under conditions of rapid diffusion provides an important framework for the development of applications in synthetic ecology and biotechnology.