A putative pheromone precursor gene of Neurospora crassa, mfa-1 (which encodes mating factor a-1), was identified as the most abundant clone in starved mycelial and perithecial cDNA libraries. Northern analysis demonstrated high mfa-1 expression in all mating type a tissues and suggested low expression levels in mat A tissues. The mfa-1 gene was expressed as an approximately 1.2-kb transcript predicted to encode a 24-residue peptide, followed by a long 3' untranslated region (3' UTR). The predicted MFA1 sequence showed 100% sequence identity to PPG2 of Sordaria macrospora and structural similarity (a carboxy-terminal CAAX motif) to many hydrophobic fungal pheromone precursors. Mutants with a disrupted open reading frame (ORF) in which the critical cysteine residue had been changed to a nonprenylatable residue, tyrosine (YAAX mutants), were isolated, as were mfa-1 mutants with intact ORFs but multiple mutations in the 3' noncoding region (CAAX mutants). The 3' UTR is required for the full range of mfa-1 gene activity. Both classes of mutants showed delayed and reduced vegetative growth (which was suppressed by supplementation with a minute amount [30 micro M] of ornithine, citrulline, or arginine), as well as aberrant sexual development. When crossed as female parents to wild-type males, the CAAX and YAAX mutants showed greatly reduced ascospore production. No ascospores were produced in homozygous mfa-1 crosses. As males, YAAX mat a mutants were unable to attract wild-type mat A trichogynes (female-specific hyphae) or to initiate sexual development, while CAAX mat a mutants were able to mate and produce sexual progeny despite their inability to attract mat A trichogynes. In the mat A background, both CAAX and YAAX mutants showed normal male fertility but defective vegetative growth and aberrant female sexual development. Thus, the mfa-1 gene appears to have multiple roles in N. crassa development: (i) it encodes a hydrophobic pheromone with a putative farnesylated and carboxymethylated C-terminal cysteine residue, required by mat a to attract trichogynes of mat A; (ii) it is involved in female sexual development and ascospore production in both mating types; and (iii) it functions in vegetative growth of both mating types.