Molecular characterization of the Plasmodium falciparum genome has led to identification of polymorphic loci and the mechanisms generating genetic diversity in this parasite. This information has resulted in the development of molecular methods to type parasite diversity in the field. Consequently, we are now in a position to describe the population genetics and dynamics of P. falciparum. The limited number of field studies that have been conducted to date have revealed an extraordinary degree of genetic diversity in natural parasite populations. Heterozygous recombination which occurs during meiosis appears to be one mechanism for generating genetic diversity. The rate at which such recombination occurs in natural parasite populations defines the genetic structure of the parasite population and can influence the ability of the parasite to respond to selection pressure. The high frequency of single genotype infections and the female-biased gametocyte sex ratios found in hyperendemic malaria areas suggest that self-fertilization occurs frequently. Population-wide surveys of allele frequencies in endemic areas have, however, shown no evidence of linkage disequilibrium and are consistent with a panmictic population structure. We argue that these studies have only sampled symptomatic infections, within which rare or recombinant genotypes may be disproportionately represented. They also take no account of the spatial structure of P. falciparum populations. Systematic investigations of the amount of heterozygosity in small areas as part of population-wide surveys are required to define the genetic structure of P. falciparum populations. Population dynamic studies which consider genetic heterogeneity of P. falciparum have shown fluctuations of different serotypes in space and time. The host immune response appears to play an important role in generating these dynamics. Integrated field and laboratory studies, which consider the interaction between population genetics and dynamics, will be necessary to describe the population biology of P. falciparum.