An adenylate-cyclase-encoding gene, tac1, of Trichoderma virens, a soil fungus used in the biocontrol of plant pathogens, has been cloned and sequenced. The tac1 ORF spanned 7032 bp, encoding a protein of 2153 aa, which shared an identity of 65 % with the adenylate cyclase of Colletotrichum lagenarium. Deletion of tac1, through double-crossover homologous recombination, lowered the intracellular cAMP levels to below the detection limit. The mutants showed only 5-6 % of the wild-type growth rate on agar, but grew normally in shake culture. The mutants did not sporulate in darkness, and the spores failed to germinate in water. In the confrontation assay, the mutants did not overgrow the test plant pathogens Sclerotium rolfsii, Rhizoctonia solani and Pythium sp. Against Pythium sp., the mutants produced a clear zone of inhibition in the confrontation assay. HPLC analysis and bioassay showed reduced secondary metabolite production in the mutants. Using suppression subtractive hybridization (SSH), the genes that were underexpressed in the mutants were identified. Based on an array of 53 SSH library clones, 11 clones were identified as strongly downregulated in the Deltatac1 mutants; of these 11 clones, nine sequences were homologous to secondary metabolism-related gene sequences. Therefore, cAMP signalling positively regulates secondary metabolism in T. virens. This is believed to be the first direct genetic study on the role of cAMP signalling in a Trichoderma sp. Tac1 is also believed to be the first regulatory protein to be identified in T. virens that is involved in growth, germination, mycoparasitism and secondary metabolism.