Sexual reproduction enables organisms to shuffle two parental genomes to produce recombinant progeny, and to purge the genome of deleterious mutations. Sex is conserved in virtually all organisms, from bacteria and fungi to plants and animals, and yet the mechanisms by which sexual identity are established share both conserved general features and are remarkably diverse. In animals, sexual identity is established by dimorphic sex chromosomes, whereas in fungi a specialized region of the genome, known as the mating-type locus, governs the establishment of cell type identity and differs in DNA sequence between cells of different mating-types. Recent studies on the mating-type loci of fungi and algae reveal features shared with the mammalian X and Y chromosomes, suggesting that these represent early steps in the evolution of sex chromosomes.