Once recombination is halted between the X and Y chromosomes, sex chromosomes begin to differentiate and transition to heteromorphism. While there is a remarkable variation across clades in the degree of sex chromosome divergence, far less is known about the variation in sex chromosome differentiation within clades. Here, we combined whole-genome and transcriptome sequencing data to characterize the structure and conservation of sex chromosome systems across Poeciliidae, the livebearing Glade that includes guppies. We found that the Poecilia reticulata XY system is much older than previously thought, being shared not only with its sister species, Poecilia wingei, but also with Poecilia picta, which diverged roughly 20 million years ago. Despite the shared ancestry, we uncovered an extreme heterogeneity across these species in the proportion of the sex chromosome with suppressed recombination, and the degree of Y chromosome decay. The sex chromosomes in P. reticulata and P. wingei are largely homomorphic, with recombination in the former persisting over a substantial fraction. However, the sex chromosomes in P. picta are completely nonrecombining and strikingly heteromorphic. Remarkably, the profound degradation of the ancestral Y chromosome in P. picta is counterbalanced by the evolution of functional chromosome-wide dosage compensation in this species, which has not been previously observed in teleost fish. Our results offer important insight into the initial stages of sex chromosome evolution and dosage compensation.