In Ustilago maydis, the causal agent of corn smut, the morphological transition from yeast to filamentous growth is inextricably linked to pathogenicity; budding haploid cells are saprobic and, upon mating of compatible strains, the fungus converts to dikaryotic filamentous growth and obligate parasitism. The filamentous dikaryon proliferates in the host plant, inducing tumor formation and undergoing additional morphological changes that eventually result in the production of melanized diploid teliospores. In an attempt to identify new trans-acting factors that regulate morphogenesis in U. maydis, we searched for the presence of common binding sequences in the promoter region of a set of 37 genes downregulated in the filamentous form. Putative cis-acting regulatory sequences fitting the consensus binding site for the Aspergillus nidulans transcription factor StuA were identified in 13 of these genes. StuA is a member of the APSES transcription factors which contain a highly conserved DNA-binding domain with a basic helix-loop-helix (bHLH)-like structure. This class of proteins comprises critical regulators of developmental processes in ascomycete fungi such as dimorphic growth, mating, and sporulation but has not been studied in any fungus of the phylum Basidiomycota. A search for StuA orthologs in the U. maydis genome identified a single closely related protein that we designated Ust1. Deletion of ust1 in budding haploid wild-type and solopathogenic strains led to filamentous growth and abolished mating, gall induction, and, consequently, in planta teliosporogenesis. Furthermore, cultures of ust1 null mutants produced abundant thick-walled, highly pigmented cells resembling teliospores which are normally produced only in planta. We showed that ssp1, a gene highly induced in teliospores produced in the host, is also abundantly expressed in cultures of ust1 null mutants containing these pigmented cells. Our results are consistent with a major role for ust1 in regulating dimorphism, virulence, and the sporulation program in U. maydis.