Placozoans, the simplest free-living animals, have never been observed to reproduce sexually. Here, we describe molecular evidence for sexual reproduction within one clade of the Placozoa. In a population sample of 10 individuals, within-individual and overall nucleotide diversity were similar to each other and consistent with levels observed in sexually reproducing species. Intergenic recombination as well as the sharing of alleles between heterozygous and homozygous individuals was also observed. These hallmarks of sexual reproduction establish that sex is indeed present in this phylum.