The sexual system of the caridean genus Lysmata has been described until recently as protandric hermaphroditism, in which individuals change sex from male to female with increasing size. However, recent studies by Bauer and Holt (1998) and Fiedler (1998) have shown that female-phase individuals of at least two species are outcrossing simultaneous hermaphrodites, a sexual system described here as protandric simultaneous hermaphroditism (PSH). There is considerable variation in the ontogeny of protandric carideans, revealing an underlying flexibility in sex determination and development which has made PSH possible in at least some Lysmata spp. Possible costs and benefits of retention of male reproductive function in female-phase hermaphrodites are proposed. The PSH appears to be unique (to date) within the Decapoda and other Malacostraca to the caridean genus Lysmata and perhaps the related genus Exhippolysmata. It is puzzling that PSH has evolved in a group with such considerable variation in socio-ecological attributes: some Lysmata species are warm temperate, highly aggregated, with unspecialized (facultative) fish-cleaning behavior while others are tropical species, occur at low density in hermaphrodite pairs associated with sea anemones, and are specialized fish cleaners. Description of sexual systems, costs/benefits of PSH, and socio-ecological attributes of Lysmata, considered in the context of a phylogeny of the group, will be necessary to understand how PSH evolved in Lysmata and why it has not evolved in other groups of protandric carideans.