Molecular epidemiology, broadly defined, is the application of molecular genetic techniques to the dynamics of disease in a population. In this review, we briefly describe molecular and analytical tools available for molecular epidemiological studies and then provide an overview of how they can be applied to better understand parasitic disease. A range of new molecular tools have been developed in recent years, allowing for the direct examination of parasites from clinical or environmental samples, and providing access to relatively cheap, rapid, high throughput molecular assays. At the same time, new analytical approaches, in particular those derived from coalescent theory, have been developed to provide more robust estimates of evolutionary processes and demographic parameters from multilocus, genotypic data. To date, the primary application of molecular epidemiology has been to provide specific and sensitive identification of parasites and to resolve taxonomic issues, particularly at the species level and below. Population genetic studies have also been used to determine the extent of genetic diversity among populations of parasites and the degree to which this diversity is associated with different host cycles or epidemiologically important phenotypes. Many of these studies have also shed new light on transmission cycles of parasites, particularly the extent to which zoonotic transmission occurs, and on the prevalence and importance of mixed infections with different parasite species or intraspecific variants (polyparasitism). A major challenge, and one which is now being addressed by an increasing number of studies, is to find and utilise genetic markers for complex traits of epidemiological significance, such as drug resistance, zoonotic potential and virulence.