Penicillium dipodomyis is thought to be an exclusively asexual fungus associated with Kangaroo Rats, Dipodomys species, and is unique among Penicillium species in growing at 37°C but producing no known toxins. Lack of recombination within P. dipodomyis would result in limited adaptive flexibility but possibly enhance local adaptation and host selection via maintenance of favourable genotypes. Here, analysis of DNA sequence data from five protein-coding genes shows that recombination occurs within P. dipodomyis on a small spatial scale. Furthermore, detection of mating-type alleles supports outcrossing and a sexual cycle in P. dipodomyis. P. dipodomyis was a weaker competitor in in vitro assays with other Penicillium species found in association with Kanagaroo rats. Bayesian species level analysis suggests that the P. dipodomyis lineage diverged from closely related species also found in cheek pouches of Kangaroo Rats and their stored seeds about 11 million years ago, a similar divergence time as Dipodomys from its sister rodent taxa.