The sexual development and virulence of the fungal pathogen Cryptococcus neoformans is controlled by a bipolar mating system determined by a single locus that exists in two alleles, α and a. The α and a mating-type alleles from two divergent varieties were cloned and sequenced. The C. neoformans mating-type locus is unique, spans >100 kb, and contains more than 20 genes. MAT-encoded products include homologs of regulators of sexual development in other fungi, pheromone and pheromone receptors, divergent components of a MAP kinase cascade, and other proteins with no obvious function in mating. The α and a alleles of the mating-type locus have extensively rearranged during evolution and strain divergence but are stable during genetic crosses and in the population. The C. neoformans mating-type locus is strikingly different from the other known fungal mating-type loci, sharing features with the self-incompatibility systems and sex chromosomes of algae, plants, and animals. Our study establishes a new paradigm for mating-type loci in fungi with implications for the evolution of cell identity and self/nonself recognition.