In this chapter we review the current state of our knowledge regarding the molecular processes by which Chlamydia species divide and differentiate between their replicative and infectious forms. We will (1) give a general introduction to cell division in Gram-negative bacteria, (2) compare this process with the process of cell division in Chlamydia, (3) address the ‘chlamydial anomaly' by discussing our collective knowledge of peptidoglycan synthesis in Chlamydia, (4) describe our current understanding of the localization and kinetics of peptidoglycan assembly, (5) compare binary fission and polarized division as models of Chlamydia replication, (6) review what is known about the elementary body (EB) to reticulate body (RB) transition, and (7) evaluate the current models for RB to EB differentiation. We will also describe similarities and differences observed regarding division, peptidoglycan and persistence among the different members of the Chlamydiae phylum.