Allorecognition is the ability of an organism to differentiate self or close relatives from unrelated individuals. The best known applications of allorecognition are the prevention of inbreeding in hermaphroditic species (e.g., the self-incompatibility [SI] systems in plants), the vertebrate immune response to foreign antigens mediated by MHC loci, and somatic fusion, where two genetically independent individuals physically join to become a chimera. In the few model systems where the loci governing allorecognition outcomes have been identified, the corresponding proteins have exhibited exceptional polymorphism. But information about the evolution of this polymorphism outside MHC is limited. We address this subject in the ascidian Botryllus schlosseri, where allorecognition outcomes are determined by a single locus, called FuHC (Fusion/HistoCompatibility). Molecular variation in FuHC is distributed almost entirely within populations, with very little evidence for differentiation among different populations. Mutation plays a larger role than recombination in the creation of FuHC polymorphism. A selection statistic, neutrality tests, and distribution of variation within and among different populations all provide evidence for selection acting on FuHC, but are not in agreement as to whether the selection is balancing or directional.