Aspergillus fumigatus is a saprotrophic fungus whose spores are ubiquitous in the atmosphere. It is also an opportunistic human pathogen in immunocompromised individuals, causing potentially lethal invasive infections, and is associated with severe asthma and sinusitis. The species is only known to reproduce by asexual means, but there has been accumulating evidence for recombination and gene flow from population genetic studies, genome analysis, the presence of mating-type genes and expression of sex-related genes in the fungus. Here we show that A. fumigatus possesses a fully functional sexual reproductive cycle that leads to the production of cleistothecia and ascospores, and the teleomorph Neosartorya fumigata is described. The species has a heterothallic breeding system; isolates of complementary mating types are required for sex to occur. We demonstrate increased genotypic variation resulting from recombination between mating type and DNA fingerprint markers in ascospore progeny from an Irish environmental subpopulation. The ability of A. fumigatus to engage in sexual reproduction is highly significant in understanding the biology and evolution of the species. The presence of a sexual cycle provides an invaluable tool for classical genetic analyses and will facilitate research into the genetic basis of pathogenicity and fungicide resistance in A. fumigatus, with the aim of improving methods for the control of aspergillosis. These results also yield insights into the potential for sexual reproduction in other supposedly 'asexual' fungi.