Puffballs are one kind of reproductive body of a group of fungi called the Basidiomycota.  The basidiomycotes also include fungi that produce reproductive bodies that we call mushrooms. The reproductive bodies are responsible for producing spores. Puffballs release millions of tiny spores into the atmosphere. The spores travel considerable distances before settling to earth. Spores germinate to produce another fungus.

Fungi are very different from other organisms that you are familiar with. The body of a fungus is composed of a large number of thin tubes called hyphae. The hyphae are all interconnected, so the cells of the fungus can communicate with one another (e.g. fungi are truly multicellular). The walls of the hyphae are made of chitin, which is the same material as in insect exoskeletons. A mass of hyphae is called a mycelium, which is the main part of the body of the fungus ­ this is the white stuff you see when you break open a rotten log, or the mass of white or green stuff on rotting strawberries. Fungi are absorptive heterotrophs, and the hyphae first secrete enzymes onto their substrate, then absorb the material that is digested by the enzymes. Thus fungi are important decomposers, but they are also important pathogens, both of humans and of our crop plants, when we are serving as their substrates.

Fungal reproduction is even stranger than their way of life. In the Basidiomycota, a germinating spore produces  what is called a "primary mycelium". The primary mycelia are either male or female, and the cells of the hyphae are haploid (they have only one member of each of the homologous pairs of chromosomes). These primary mycelia grow, but to reproduce they have to join with another primary mycelium of the opposite sex. When a male fungus meets a female fungus, they merge hyphae to form a secondary mycelium. However, only the cytoplasm of the cells in the secondary mycelium merges (the process of merging cytoplasm is called plasmogamy); the nuclei remain separate and haploid. So a secondary mycelium is like a male and a female living together in the same body but keeping their genetic material separate. These are called "dikaryotic" hyphae, to distinguish them from truly diploid cells (where the two sets of chromosomes merge into a single nucleus). Most of the body of a basidiomycote fungus is a dikaryotic mycelium. However, parts of the body become specialized for sexual reproduction. These are the puffballs (or mushrooms). Inside the puffball, the nuclei of some cells merge (this process is called karyogamy) to form diploid nuclei. These diploid nuclei then immediately undergo meiosis to produce haploid spores, starting the whole process over.