The phylogenesis of fungi is controversial due to their simple morphology and poor fossilization. Traditional classification supported by morphological studies and physiological traits placed the fission yeasts in one group with ascomycetous yeasts. The rRNA sequence comparisons, however, revealed an enormous evolutionary gap between Saccharomyces and Schizosaccharomyces. As shown in this review, the protein sequences also show a large gap which is almost as large as that separating Schizosaccharomyces from higher animals. Since the two yeasts share features (both cytological and molecular) in common which are also characteristic of ascomycetous fungi, their separation must have taken place later than the sequence differences may suggest. Possible reasons for the paradox are discussed. The sequence data also suggest a slower evolutionary rate in the Schizosaccharomyces lineage than in the Saccharomyces branch. In the fission yeast lineage two ramifications can be supposed. First S. japonicus (Hasegawaea japonica) branched off, then S. octosporus (Octosporomyces octosporus) separated from S. pombe.