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Transposons are major genome constituents that can mobilize and trigger mutations, DNA breaks and chromosome rearrangements. Transposon silencing is particularly important in the germline, which is dedicated to transmission of the inherited genome. Piwi-interacting RNAs (piRNAs) guide a host defence system that transcriptionally and post-transcriptionally silences transposons during germline development. While germline control of transposons by the piRNA pathway is conserved, many piRNA pathway genes are evolving rapidly under positive selection, and the piRNA biogenesis machinery shows remarkable phylogenetic diversity. Conservation of core function combined with rapid gene evolution is characteristic of a host–pathogen arms race, suggesting that transposons and the piRNA pathway are engaged in an evolutionary tug of war that is driving divergence of the biogenesis machinery. Recent studies suggest that this process may produce biochemical incompatibilities that contribute to reproductive isolation and species divergence.