Blastomyces dermatitidis is a dimorphic fungal pathogen that primarily causes blastomycosis in the midwestern and northern United States and Canada. While the genes controlling sexual development have been known for a long time, the genes controlling sexual reproduction of B. dermatitidis (teleomorph, Ajellomyces dermatitidis) are unknown. We identified the mating-type (MAT) locus in the B. dermatitidis genome by comparative genomic approaches. The B. dermatitidis MAT locus resembles those of other dimorphic fungi, containing either an alpha-box (MAT1-1) or an HMG domain (MAT1-2) gene linked to the APN2, SLA2, and COX13 genes. However, in some strains of B. dermatitidis, the MAT locus harbors transposable elements (TEs) that make it unusually large compared to the MAT locus of other dimorphic fungi. Based on the MAT locus sequences of B. dermatitidis, we designed specific primers for PCR determination of the mating type. Two B. dermatitidis isolates of opposite mating types were cocultured on mating medium. Immature sexual structures were observed starting at 3 weeks of coculture, with coiled-hyphae-containing cleistothecia developing over the next 3 to 6 weeks. Genetic recombination was detected in potential progeny by mating-type determination, PCR-restriction fragment length polymorphism (PCR-RFLP), and random amplification of polymorphic DNA (RAPD) analyses, suggesting that a meiotic sexual cycle might have been completed. The F1 progeny were sexually fertile when tested with strains of the opposite mating type. Our studies provide a model for the evolution of the MAT locus in the dimorphic and closely related fungi and open the door to classic genetic analysis and studies on the possible roles of mating and mating type in infection and virulence.