The expression is most easily illustrated by a cladogram:
|Sister group relationships|
Taxon A and taxon B are sister groups to each other. Taxa A and B, together with any other extant or extinct descendants of their most recent common ancestor (MRCA),[Note 1] form a monophyletic group, the clade AB. Clade AB and taxon C are also sister groups. Taxa A, B, and C, together with all other descendants of their MRCA form the clade ABC.
The whole clade ABC is itself a subtree of a larger tree which offers yet more sister group relationships, both among the leaves and among larger, more deeply rooted clades. The tree structure shown connects through its root to the rest of the universal tree of life.
In cladistic standards, taxa A, B, and C may represent specimens, species, genera, or any other taxonomic units. If A and B are at the same taxonomic level, terminology such as sister species or sister genera can be used.
The term "sister group" is used in phylogenetic analysis, and only groups identified in the analysis are labeled as sister groups. An example is in birds, whose sister group is commonly cited as the crocodiles, but that is true only when dealing with extant taxa. The bird family tree is rooted in the dinosaurs, and there were a number of extinct groups branching off of dinosaurs before coming to the last common ancestor of birds and crocodiles. Thus, the term sister group must be seen as a relative term, with the caveat that the sister group is the closest relative only among the groups/species/specimens that are included in the analysis.