Expression of the Vr2 gene of Cryphonectria parasitica is down-regulated in strains of the fungus containing a double-stranded RNA genetic element that reduces fungal virulence (W. A. Powell and N. K. Van Alfen, Mol. Cell. Biol. 7:3688-3693, 1987). We have sequenced the Vr2 gene and characterized its structure; the mRNA contains a short open reading frame whose product has structural similarities to several fungal pheromones. A null mutant was constructed by homologous recombination to determine the function of the Vr2 gene and whether its disruption resulted in any of the altered phenotypes exhibited by many hypovirulent strains, such as reductions in virulence, pigmentation, and sporulation. The Vr2 null mutant (18dm) exhibited a wild-type phenotype with respect to gross colony morphology, growth rate, pigmentation, asexual spore viability, and virulence in apple fruit and chestnut trees. However, numbers of asexual fruiting bodies (pycnidia) and conidia were reduced significantly in comparison with the wild-type strain EP155/2. In sexual crosses of 18dm with a wild-type strain of the opposite mating type, perithecia (sexual fruiting bodies) developed but were barren. Deletion of the Vr2 gene results in a phenotype that mimics that of many double-stranded-RNA-containing hypovirulent strains; i.e., the null mutant exhibits significant reductions in asexual sporulation and pycnidium production as well as impaired sexual crossing ability. To our knowledge, this is the first report of the partial reproduction of a virus-induced phenotype by deletion of a virus-perturbed host gene.The filamentous fungus Cryphonectnia (Endothia)parasitica (Murr.) Barr is responsible for the chestnut blight disease, which destroyed American chestnut forests over a 40-year period during the early part of this century (reviewed in references 3, 4, and 42). Biological control of C. parasitica and recovery of infected trees has occurred in Europe by the cytoplasmic transmission of double-stranded RNA (dsRNA) genetic elements between fungal strains. These virus-like elements typically confer a reduction in virulence (hypovirulence) to the fungus and are transmitted from hypovirulent to virulent strains during hyphal anastomosis (fusion of hyphae). In addition to hypovirulence, fungal strains harboring these genetic elements may exhibit an altered colony morphology that includes reduced sporulation and changes in pigmentation (21; reviewed in references 4, 33, 42, and 52). Reductions in levels of enzymes such as laccase (9,28,40,41) and cutinase (53) or of metabolites such as oxalate (27, 28) may also occur in hypovirulent strains. The phenomenon of cytoplasmically transmissible hypovirulence in C. parasitica is one of the best-documented examples of a naturally occurring form of biological control for plant disease. Our studies are directed towards understanding how dsRNA genetic elements in the fungus cause the attendant changes in host phenotype.The dsRNA virus-like elements associated with different hypovirulent strains of C. parasiti...