The sexual strain of the planarian Schmidtea mediterranea is a hermaphrodite indigenous to Tunisia and several Mediterranean islands. Here, we isolated individual chromosomes and used sequencing, Hi-C and linkage mapping to assemble a chromosome-scale genome reference. The linkage map revealed an extremely low rate of recombination on chromosome 1. We confirmed suppression of recombination on chromosome 1 by genotyping of individual sperm and oocytes. We showed that previously identified genomic regions that maintain heterozygosity even after prolonged inbreeding comprise essentially all of chromosome 1. Genome sequencing of individuals isolated in the wild indicated that this phenomenon has evolved specifically in populations from Sardinia and Corsica. We found that most known master regulators of the reproductive system are located on chromosome 1. We used RNA interference to knock down a gene with haplotype-biased expression and observed that this led to the formation of a more pronounced female mating organ. Based on these observations, we propose that chromosome 1 is a sex-primed autosome primed for evolution into a sex chromosome.