Hamilton's rule explains when natural selection will favor altruism between conspecifics, given their degree of relatedness. In practice, indicators of relatedness (such as scent) coevolve with strategies based on these indicators, a fact not included in previous theories of kin recognition. Using a combination of simulation modeling and mathematical extension of Hamilton's rule, we demonstrate how altruism can emerge and be sustained in a coevolutionary setting where relatedness depends on an individual's social environment and varies from one locus to another. The results support a very general expectation of widespread, and not necessarily weak, conditional altruism in nature.