Abstract We introduce a variant of the Axelrod model of cultural dissemination in which agents change their physical locations, social links, and cultures. Numerical simulations are used to investigate the evolution of social network communities and the cultural diversity within and between these communities. An analysis of the simulation results shows that an initial peak in the cultural diversity within network communities is evident before agents segregate into a final configuration of culturally homogeneous communities. Larger long-range interaction probabilities facilitate the initial emergence of culturally diverse network communities, which leads to a more pronounced initial peak in cultural diversity within communities. At equilibrium, the number of communities, and hence cultures, increases when the initial cultural diversity increases. However, the number of communities decreases when the lattice size or population density increases. A phase transition between two regimes of initial cultural diversity is evident. For initial diversities below a critical value, a single network community and culture emerges that dominates the population. For initial diversities above the critical value, multiple culturally homogeneous communities emerge. The critical value of initial diversity at which this transition occurs increases with increasing lattice size and population density and generally with increasing absolute population size. We conclude that larger initial diversities promote cultural heterogenization, while larger lattice sizes, population densities, and in fact absolute population sizes promote homogenization.