Extreme genetic polymorphism maintained by balancing selection (so called because many alleles are maintained in a balance by a mechanism of rare allele advantage) is intimately associated with the important task of self/non-self-discrimination. Widely disparate self-recognition systems of plants, animals and fungi share several general features, including the maintenance of large numbers of alleles at relatively even frequency, and persistence of this variation over very long time periods. Because the evolutionary dynamics of balanced polymorphism are very different from those of neutral genetic variation, data on balanced polymorphism have been used as a novel source for inference of the history of populations. This review highlights the unique evolutionary properties of balanced genetic polymorphism, and the use of theoretical understanding in analysis and application of empirical data for inference of population history. However, a second goal of this review is to point out where current theory is incomplete. Recent observations suggest that entirely novel selective forces may act in concert with balancing selection, and these novel forces may be extremely potent in shaping genetic variation at self-recognition loci.