Insertional mutagenesis is an effective way to study the infection mechanism of fungal pathogens. In an attempt to identify the genes involved in appressorium formation from Magnaporthe grisea, we carried out Agrobacterium tumefaciens mediated transformation (ATMT) of the fungus. Analysis of the region flanking the T-DNA integration site in one of the appressorium mutants showed insertion in a gene coding a 78 amino acid protein (MGA1), showing no significant homology to any of the known proteins. The mutant mga1 caused neither foliar nor root infection. Complementation of the mutated gene with the full length wild type gene restored appressorium formation as well as rice infection demonstrating the involvement of this gene in pathogenicity of M. grisea. In an indirect immunolocalisation assay, the MGA1 expression was seen predominantly in germ tube and appressoria. The mutant was impaired in glycogen and lipid mobilization required for appressorium formation. The glycerol content in the mycelia of the mutant under hyperosmotic stress conditions was less as compared to wild type and was thus unable to tolerate the hyperosmotic stress induced by sorbitol. We hypothesize that MGA1 plays a crucial role in signal transduction leading to the metabolism of glycogen and lipids, which is a part of appressorium differentiation process.