The basidiomycetous yeast genus Malassezia is the most abundant fungal genus residing on healthy human skin but is also involved in various skin diseases such as dandruff and pityriasis versicolor. In specific patient groups, Malassezia can cause bloodstream infections and recent studies implicated the yeast in Crohn’s disease and certain cancers. Its ubiquitous presence on human skin in both healthy and disease states, its fastidious growth and nutritional requirements, and the difficulty to obtain living cells from complex body sites pose challenges for a better understanding of the role of Malassezia in/on the human body. With a strong focus on Malassezia furfur as a model species, we used genomic and genetic approaches to further elucidate its evolutionary trajectory. We discovered multiple hybridization events and the presence of mating genes, suggestive of a sexual state, and with possible implications for pathogenicity. We explored the mitochondrial genome evolution and identified potential targets for future diagnostic assays and typing. Increasing indications suggest that both host and microorganism genotypes determine whether their interaction results in health or disease, but intraspecific variation is often insufficiently considered. Previous studies have suggested high intraspecies genetic heterogeneity among M. furfur strains, but for a small number of strains. We confirmed extensive genetic variation among 315 M. furfur isolates, with multiple hybrids and mating compatible genotypes, and in vitro genotype related virulence trends. Our data identified interesting candidates for future studies in virulence model systems. Furthermore, we illustrated in dogs the potential of endoscopy for successful recovery of culturable Malassezia cells from complex deep body sites, and developed a novel antifungal susceptibility testing method using flatbed scanners in combination with resazurin.