Microsatellites are among the most versatile of genetic markers, being used in an impressive number of biological applications. However, the evolutionary dynamics of these markers remain a source of contention. Almost 20 years after the discovery of these ubiquitous simple sequences, new genomic data are clarifying our understanding of the structure, distribution and variability of microsatellites in genomes, especially for the eukaryotes. While these new data provide a great deal of descriptive information about the nature and abundance of microsatellite sequences within eukaryotic genomes, there have been few attempts to synthesise this information to develop a global concept of evolution. This review provides an up-to-date account of the mutational processes, biases and constraints believed to be involved in the evolution of microsatellites, particularly with respect to the creation and degeneration of microsatellites, which we assert may be broadly viewed as a life cycle. In addition, we identify areas of contention that require further research and propose some possible directions for future investigation. BioEssays 28: 1040–1050, 2006. © 2006 Wiley Periodicals, Inc.