A triglyceride lipase gene LIP1 was identified in the genome of Fusarium graminearum strain PH-1. The predicted protein encoded by LIP1 contains 591 amino acid residues with a putative N-terminal signal peptide and shows 57 and 40-44 % identity to a Botrytis cinerea lipase and five Candida rugosa lipases, respectively. Yeast cells overexpressing LIP1 showed lipolytic activity against a broad range of triglyceride substrates. Northern blot analyses revealed that expression of LIP1 was activated in planta during the fungal infection process. LIP1 expression was strongly induced in minimal medium supplemented with wheatgerm oil, but only weakly induced by olive oil and triolein. In contrast, supplementation with other carbon sources, including glucose, sucrose, apple pectin and wheat cell-wall material, did not induce LIP1 expression. Saturated fatty acids were the strongest inducers for LIP1 expression and this induction was suppressed proportionally by the presence of the unsaturated fatty acid. To determine the potential function of LIP1, gene replacement was conducted on strain PH-1. When compared with wild-type PH-1, DLIP1 mutants showed greatly reduced lipolytic activities at the early stage of incubation on minimal medium supplemented with either saturated or unsaturated lipid as the substrate, indicating that LIP1 encodes a secreted lipase for exogenous lipid hydrolysis. Moreover, the DLIP1 mutants exhibited growth deficiency on both liquid and solid minimal media supplemented with the saturated triglyceride tristearin as the sole carbon source, suggesting that LIP1 is required for utilization of this substance. Despite these differences, no variation in disease symptoms between the DLIP1 mutants and the wild-type strain was observed on susceptible cereal hosts.