Wheat, maize, rye and certain other agriculturally important species in the Poaceae family produce the benzoxazolinone class of phytoalexins on pest and pathogen attack. Benzoxazolinones can inhibit the growth of pathogens. However, certain fungi can actively detoxify these compounds. Despite this, a clear link between the ability to detoxify benzoxazolinones and pathogen virulence has not been shown. Here, through comparative genome analysis of several Fusarium species, we have identified a conserved genomic region around the FDB2 gene encoding an N-malonyltransferase enzyme known to be involved in benzoxazolinone degradation in the maize pathogen Fusarium verticillioides. Expression analyses demonstrated that a cluster of nine genes was responsive to exogenous benzoxazolinone in the important wheat pathogen Fusarium pseudograminearum. The analysis of independent F. pseudograminearum FDB2 knockouts and complementation of the knockout with FDB2 homologues from F. graminearum and F. verticillioides confirmed that the N-malonyltransferase enzyme encoded by this gene is central to the detoxification of benzoxazolinones, and that Fdb2 contributes quantitatively to virulence towards wheat in head blight inoculation assays. This contrasts with previous observations in F. verticillioides, where no effect of FDB2 mutations on pathogen virulence towards maize was observed. Overall, our results demonstrate that the detoxification of benzoxazolinones is a strategy adopted by wheat-infecting F. pseudograminearum to overcome host-derived chemical defences.