The chemical composition and pharmacological effects of Cordyceps militaris are similar to those of Cordyceps sinensis, with the former undergoing greater development and utilization. Strain degeneration is a common phenomenon that occurs with high frequency during the subculturing of C. militaris, however, and the mechanism underlying strain degeneration remains unclear. In this study, we used touch‐down PCR to compare the ITS1 + 5.8S + ITS2, 18S, 28S and mating‐type (MAT) regions sequence of wild‐type and degenerated strains of C. militaris. We also used quantitative real‐time PCR to analyze expression levels of the CmMAT gene. Sequence analysis showed that the ITS1 + 5.8S + ITS2 and 28S regions of degenerated and wild‐type strains were completely identical, the 18S region of the degenerated strain contained seven single‐base mutations, including six base substitutions and one single‐base insertion. Compared with the wild‐type strain, the degenerated strain contained a deletion of the MAT1–2‐1 region, three base substitutions in the MAT1–1‐1 region, and a base substitution in the MAT1–1‐2 region that causes a glycine‐to‐valine amino acid substitution. Quantitative real‐time PCR analysis detected no CmMAT1–2‐1 gene expression in the degenerated strain, confirming the deletion of the CmMAT1–2‐1 gene. Expression levels of the CmMAT1–1‐1 and CmMAT1–1‐2 genes were significantly down‐regulated to only 7.5 % and 4.4 %, respectively, that of the wild‐type strain. These results indicate that 18S and MAT region mutations, as well as down‐regulated of CmMAT gene expression levels, may play important roles in C. militaris degeneration. This study provides a theoretical basis for further elucidation of the molecular mechanisms of C. militaris degeneration.