An evaluation of the structure of incompatibility systems in the higher fungi and its effect on inbreeding and outbreeding indicates that: In unifactorial systems a one-locus structure, which permits 50 per cent, inbreeding, is preferable to a two-locus structure, which would permit inbreeding to rise above 50 per cent. In bifactorial systems a two-locus structure for each factor is advantageous because it makes possible a high outbreeding potential with a small number of alleles. The two-locus structure also confers flexibility on the inbreeding potential. A symmetrical distribution of alleles among the four loci of a two-locus bifactorial system allows for maximal outbreeding. The advantage of symmetry is most pronounced when the total number of allelic specificities is not large. The asymmetrical distribution of alleles among the four incompatibility loci of Schizophyllum commune suggests that its incompatibility system evolved from a one-locus unifactorial system. The Afi locus, with 32 alleles, is assumed to be the oldest locus; the remaining three loci, with 9 alleles each, are assumed to have come into operation within a short time of each other, at a later stage.