Although prokaryotes ordinarily undergo binary fission to produce two identical daughter cells, some are able to undergo alternative developmental pathways that produce daughter cells of distinct cell morphology and fate. One such example is a developmental programme called sporulation in the bacterium Bacillus subtilis, which occurs under conditions of environmental stress. Sporulation has long been used as a model system to help elucidate basic processes of developmental biology including transcription regulation, intercellular signalling, membrane remodelling, protein localization and cell fate determination. This review highlights some of the recent work that has been done to further understand prokaryotic cell differentiation during sporulation and its potential applications.