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Macrocyst formation represents sexual development of cellular slime molds and begins with fusion between cells of compatible mating types. Homothallic and heterothallic strains as well as bisexual and asexual ones have been described. Macrocyst development requires certain environmental conditions such as darkness and excessive humidity. Sexual cell fusion has been analyzed at a molecular level in Dictyostelium discoideum, and several cell surface proteins related to it have been identified. Some of them are common to both mating types, while others are specific to one or other type. The involvement of cell-surface carbohydrates has also been suggested, though direct evidence for this is still lacking. Macrocyst formation is regulated by diffusible, pheromone like substances. Genetic studies on sexual development are scarce, probably because no suitable mutants have been available. However, several asexual mutants, as well as antibody and nucleotide probes, have recently been obtained, so mechanisms of sexual cell fusion may be understood in the near future. Considering the unique phylogenical position of cellular slime molds, analysis of sexual development in these organisms should contribute to the understanding of the mechanism and evolution of sexual reproduction systems.