Candida albicans, the most prevalent human fungal pathogen, is considered to be an obligate diploid that carries recessive lethal mutations throughout the genome. Here we demonstrate that C. albicans has a viable haploid state that can be derived from diploid cells under in vitro and in vivo conditions, and that seems to arise through a concerted chromosome loss mechanism. Haploids undergo morphogenetic changes like those of diploids, including the yeast-hyphal transition, chlamydospore formation and a white-opaque switch that facilitates mating. Haploid opaque cells of opposite mating type mate efficiently to regenerate the diploid form, restoring heterozygosity and fitness. Homozygous diploids arise spontaneously by auto-diploidization, and both haploids and auto-diploids show a similar reduction in fitness, in vitro and in vivo, relative to heterozygous diploids, indicating that homozygous cell types are transient in mixed populations. Finally, we constructed stable haploid strains with multiple auxotrophies that will facilitate molecular and genetic analyses of this important pathogen.