The regulator of G-protein signalling, Thn1, is involved in sexual development through pheromone signalling in the mushroom forming basidiomycete Schizophyllum commune affecting hyphal morphology and mating interactions. Thn1 plays a key role in coordinating sesquiterpene production, pheromone response and sexual development. The gene thn1 is transcriptionally regulated in response to mating with a role in clamp cell development and hydrophobin gene transcription. Further, it negatively regulates cAMP signalling and secondary metabolism. Disruption of thn1 affects dikaryotization by reducing clamp fusion and development with predominant non-fused pseudoclamps. Enhanced protein kinase A (PKA) activities in Δthn1 strains indicate that Thn1 regulates pheromone signalling by de-activating G-protein α subunits, which control cAMP-dependent PKA. The repressed formation of aerial hyphae could be linked to a reduced metabolic activity and to a transcriptional down-regulation of hyd6 and sc3 hydrophobin genes. Thn1 was also shown to be necessary for the biosynthesis of sesquiterpenes and an altered spectrum of sesquiterpenes in Δthn1 is linked to transcriptional up-regulation of biosynthesis genes. Proteome analysis indicated changes in cytoskeletal structure affecting actin localization, linking the major regulator Thn1 to growth and development of S. commune. The results support a role for Thn1 in G-protein signalling connecting development and secondary metabolism.