M2 is a double-stranded RNA (dsRNA) element occurring in the hypovirulent isolate Rhs 1A1 of the plant pathogenic basidiomycete Rhizoctonia solani. Rhs 1A1 originated as a sector of the virulent field isolate Rhs 1AP, which contains no detectable amount of the M2 dsRNA. The complete sequence (3,570 bp) of the M2 dsRNA has been determined. A 6.9-kbp segment of total DNA from either Rhs 1A1 or Rhs 1AP hybridizes with an M2-specific cDNA probe. The sequences of M2 dsRNA and of PCR products generated from Rhs 1A1 total DNA were found to be identical. Thus this report describes a fungal host containing full-length DNA copies of a dsRNA element. A major portion of the M2 dsRNA is located in the cytoplasm, whereas a smaller amount is found in mitochondria. Based on either the universal or the mitochondrial genetic code of filamentous fungi, one strand of M2 encodes a putative protein of 754 amino acids. The resulting polypeptide has all four motifs of a dsRNA viral RNAdependent RNA polymerase (RDRP) and is phylogenetically related to the RDRP of a mitochondrial dsRNA associated with hypovirulence in strain NB631 of Cryphonectria parasitica, incitant of chestnut blight. This polypeptide also has significant sequence similarity with two domains of a pentafunctional polypeptide, which catalyzes the five central steps of the shikimate pathway in yeast and filamentous fungi.In the last three decades, fungal double-stranded RNA (dsRNA) elements have been the subject of considerable research because of their potential adverse effects on plant pathogenic fungi, and the prospects of utilizing them in biocontrol schemes against the host fungus (1-3). dsRNAs have been associated with cytoplasmic hypovirulence (4) or virulence (5) in Rhizoctonia solani. We have shown that dsRNAs are ubiquitous in natural R. solani populations that include isolates covering a wide range of virulence, including hypovirulence (6). Subsequent surveys conducted in Japan (7), Florida (8), and Louisiana (9) confirmed our findings. We have also shown that the conflicting reports on the role of dsRNAs in R. solani could be attributed, at least in part, to the high degree of genetic diversity among dsRNA elements occurring in natural populations of the pathogen (10, 11). More importantly, we have presented several lines of indirect evidence suggesting that specific dsRNA elements might be involved in up-or down-regulation of virulence in R. solani (10)(11)(12)(13)(14).Recently, we described a genetic model wherein new dsRNAs appear or existing dsRNAs disappear from a given genotype (Rhs 1AP) with concomitant changes in virulence (15). Rhs 1AP is a virulent culture, member of anastomosis group 3, which is the major cause of the rhizoctonia disease syndrome of potato in North America (16,17). Rhs 1A1 originated as a sector of Rhs 1AP and contains, in addition to the two dsRNAs of Rhs 1AP (L2 and M1), three genetically distinct dsRNAs (L1, M2, and S1). Molecular sizes of L1, L2, M1, M2, and S1 dsRNAs were estimated to be 25, 23, 6.4, 3.6, and 1.2 kbp,...