Auxin is an important phytohormone regulating plant growth and development, and can also be produced by microbial pathogens including the rice-blast fungus Magnaporthe oryzae. However, the detailed biosynthesis pathway, biological function(s), and cellular distribution of such fungal auxin in M. oryzae remain largely unknown. Here, we report a sequential accumulation of intrinsic auxin in the three conidial cells, the infection structure (appressorium), and the invasive hyphae in M. oryzae. Such fungus-derived auxin was also secreted out and perceived by the host plants. A mitochondria-associated Indole-3-pyruvate decarboxylase, Ipd1, is essential for auxin/Indole-3-acetic acid biosynthesis in M. oryzae. The ipd1 mutant was defective in pathogenicity whereas overexpression of IPD1 led to enhanced virulence in rice. Chemical inhibition of fungal IAA biosynthesis, or its increase via external supplementation decreased or increased the severity of blast disease, respectively, in a dose-dependent manner. Furthermore, the IAA produced and secreted by M. oryzae governed the incidence and severity of blast disease in a quorum-dependent manner. Appressorium formation, conidial cell death critical for appressorium function, and the transcription of infection-related genes, MPG1 and INV1, directly correlated with cell density and/or IAA levels within the conidial population at the early stages of pathogenic development. Overall, our study revealed that the severity of blast disease is regulated via quorum sensing with intrinsic IAA serving as an associated signal transducer in rice blast.