Population genetics has emerged as a powerful tool for unraveling human history. In addition to the study of mitochondrial and autosomal DNA, attention has recently focused on Y-chromosome variation. Ambiguities and inaccuracies in data analysis, however, pose an important obstacle to further development of the field. Here we review the methods available for genealogical inference using Y-chromosome data. Approaches can be divided into those that do and those that do not use an explicit population model in genealogical inference. We describe the strengths and weaknesses of these model-based and model-free approaches, as well as difficulties associated with the mutation process that affect both methods. In the case of genealogical inference using microsatellite Loci, we use coalescent simulations to show that relatively simple generalizations of the mutation process can greatly increase the accuracy of genealogical inference. Because model-free and model-based approaches have different biases and Limitations, we conclude that there is considerable benefit in the continued use of both types of approaches.