Magnaporthe grisea is the most destructive pathogen of rice worldwide and the principal model organism for elucidating the molecular basis of fungal disease of plants. Here, we report the draft sequence of the M. grisea genome. Analysis of the gene set provides an insight into the adaptations required by a fungus to cause disease. The genome encodes a large and diverse set of secreted proteins, including those defined by unusual carbohydrate-binding domains. This fungus also possesses an expanded family of G-protein-coupled receptors, several new virulence-associated genes and large suites of enzymes involved in secondary metabolism. Consistent with a role in fungal pathogenesis, the expression of several of these genes is upregulated during the early stages of infection-related development. The M. grisea genome has been subject to invasion and proliferation of active transposable elements, reflecting the clonal nature of this fungus imposed by widespread rice cultivation.