The filamentous fungus Neurospora crassa undergoes a complex program of sexual development to form a fruiting body composed of several kinds of specialized tissue. Subtractive hybridization was used to isolate genes that are expressed preferentially during this sexual phase. Many such sexual development (sdv) genes were identified in a cosmid library of Neurospora genomic DNA. Fourteen of the sdv genes were subcloned, and their expression in mutant strains and under crossing and vegetative growth conditions was examined. All of the regulated transcripts were less abundant (and in many cases not detectable) in strains grown under vegetative (high nitrogen) conditions, suggesting that nitrogen starvation is required for their synthesis. The expression of most of the sdv genes also required a functional A mating type product, even under crossing growth conditions, suggesting that this product functions as a master control in sexual development. To determine if the products of the sdv genes play essential roles in the sexual cycle, a reverse-genetic approach (based on RIP (repeat-induced point mutation)-mediated gene disruptions) was used to create mutations in the genes. A mutant strain (asd-1) with a recessive crossing defect (apparently caused by the RIP process) was isolated; in this strain, early development is normal and may asci are formed, but ascospores are never delineated. A second recessive mutant strain (asd-2) was apparently created by ectopic integration of the transforming DNA into a gene required for the sexual process; in this strain the sexual process was blocked at an early stage, and the ascogeneous tissue underwent little development.