A novel virus with a double-stranded RNA (dsRNA) genome was isolated from Fusarium avenaceum strain GS-WW-224, the causal agent of potato dry rot. The virus has been designated as Fusarium avenaceum alternavirus 1 (FaAV1). Its genome consists of two dsRNA segments, 3538 bp (dsRNA1) and 2477 bp (dsRNA2) in length, encoding RNA-dependent RNA polymerase (RdRp) and a hypothetical protein (HP), respectively. The virions of FaAV1 are isometric spherical and approximately 30 nm in diameter. Multiple sequence alignments and phylogenetic analyses based on the amino acid sequences of RdRp and HP indicated that FaAV1 appears to be a new member of the proposed family Alternaviridae. No significant differences in colony morphology and spore production were observed between strains GS-WW-224 and GS-WW-224-VF, the latter strain being one in which FaAV1 was eliminated from strain GS-WW-224. Notably, however, the dry weight of mycelial biomass of GS-WW-224 was higher than that of mycelial biomass of GS-WW-224-VF. The depth and the width of lesions on potato tubers caused by GS-WW-224 were significantly greater, relative to GS-WW-224-VF, suggesting that FaAV1 confers hypervirulence to its host, F. avenaceum. Moreover, FaAV1 was successfully transmitted horizontally from GS-WW-224 to ten other species of Fusarium, and purified virions of FaAV1 were capable of transfecting wounded hyphae of the ten species of Fusarium. This is the first report of an alternavirus infecting F. avenaceum and conferring hypervirulence.