The evolution of sex chromosomes involves the suppression of recombination around a sexdetermining locus, and the subsequent divergence in DNA sequence between the two homologous sex chromosomes. Dioecious plants offer the opportunity to study independent early stages of this process, because of multiple, recent transitions between hermaphroditism and dioecy. Here, we present data from de novo genome assembly and annotation, genetic mapping and transcriptome analysis of the diploid dioecious herb Mercurialis annua, revealing several of the typical hallmarks of early sex-chromosome evolution. Until now only a single sex-linked PCR marker has been published. Our analysis identified a single linkage group, LG10, as the likely sex chromosome, with a region containing 69 sex-linked transcripts with a clearly lower male than female recombination, high X/Y divergence and multiple incidences of premature stop codons on the Y allele. We found many genes with sexbiased expression. Female-biased genes were randomly distributed across the genome, but male-biased genes were slightly enriched on the Y chromosome. Interestingly, Y-linked genes had reduced expression compared with X-linked genes, a pattern consistent with Y chromosome degeneration. M. annua has been a powerful model for the study of rapid sexualsystem transitions in plants; our results here establish it as a model for the study of the early stages of sex-chromosome evolution.