Recent studies reveal that relationships among the volvocine algae are more complex than was previously believed. Nevertheless, this group still appears to provide an unrivaled opportunity to analyze an evolutionary pathway leading from unicellularity (Chlamydomonas) to multicellularity with division of labor (Volvox). Significant progress in this regard was made in the past year when two genes playing key roles in Volvox cellular differentiation were cloned, and clues were uncovered regarding their mechanisms of action.