Pseudogenes are very common in the genomes of a wide range of organisms and, although they were originally considered as genetic junk, now several functions have been attributed to them. One important function of pseudogenes, as discussed in this chapter, is to provide material for genetic diversity. This is most prominent in the case of immunological recognition molecules such as immunoglobulins and B- and T-cell receptors, as well as in the case of antigenic variation in intracellular pathogens. Other examples discussed are olfactory receptors, ribosomal proteins, cytochrome P450s, and pseudokinases.