The microsporidia are an ancient and diverse group of protists which have many unusual characteristics. These include prokaryotic-like 70s ribosomes, enclosed nuclear division, a lack of mitochondria and complex life cycles which frequently involve vertical transmission. This use of vertical transmission is unparalleled by other protists and is seen only among bacterial endosymbionts and sex ratio distorters and in host cell organelles. Transovarially transmitted microsporidia can have unusual and profound effects on host population sex ratios. We here consider the mechanisms of transovarial transmission and its implications for parasite evolution. We review parasite/host relationships and the evolution of virulence under transovarial transmission and consider the implications of these parasites for host ecology and evolution.