The coexistence of sexual and asexual reproductive cycles within the same individual is a striking phenomenon in numerous fungi. In the fungus Aspergillus nidulans (teleomorph: Emericella nidulans) endogenous oxylipins, called psi factor, serve as hormone-like signals that modulate the timing and balance between sexual and asexual spore development. Here, we report the identification of A. nidulans ppoA, encoding a putative fatty acid dioxygenase, involved in the biosynthesis of the linoleic acid derived oxylipin psiBalpha. PpoA is required for balancing anamorph and teleomorph development. Deletion of ppoA significantly reduced the level of psiBalpha and increased the ratio of asexual to sexual spore numbers 4-fold. In contrast, forced expression of ppoA resulted in elevated levels of psiBalpha and decreased the ratio of asexual to sexual spore numbers 6-fold. ppoA expression is mediated by two developmental regulators, VeA and the COP9 signalosome, such that ppoA transcript levels are correlated with the initiation of asexual and sexual fruiting body formation. PpoA localizes in lipid bodies in these tissues. These data support an important role for oxylipins in integrating mitotic and meiotic spore development.