The entomopathogenic fungi encounter hypoxic conditions in both nature and artificial culture. Alcohol dehydrogenases (ADHs) are a group of oxidoreductases that occur in many organisms. Here we demonstrate that an alcohol dehydrogenase I, MaADH1, in the locust-specific fungal pathogen, Metarhizium acridum, functions in acetaldehyde detoxification mechanism under hypoxic conditions in growth and sporulation. The MaADH1 was highly expressed in sporulation stage under hypoxic conditions. Compared with a wild-type strain, the ΔMaADH1 mutant showed inhibited growth and sporulation under hypoxic conditions, but no impairment under normal conditions. Under hypoxic conditions, ΔMaADH1 mutant produced significant decreased alcohol, but significant increased acetaldehyde compared to wild type. M. acridum was sensitive to exogenous acetaldehyde, exhibiting an inhibited growth and sporulation with acetaldehyde added in the medium. MaADH1 did not affect virulence. Our results indicated that the MaADH1 was critical to growth and sporulation under hypoxic stress by detoxification of acetaldehyde in M. acridum.