The rice blast fungus Magnaporthe oryzae forms specialized infection structures called appressoria which are essential for gaining entry to plant tissue. Here, we report the identification of a novel nonpathogenic T-DNA-tagged mutant XF696 of M. oryzae with a single insertion in the promoter of ZNF1, which encodes a putative transcription factor (TF). Targeted gene deletion mutants of ZNF1 are nonpathogenic and unable to develop appressoria. However, Δznf1 mutants still respond to exogenous cyclic AMP on hydrophilic surfaces and can sense hydrophobic surfaces, initiating the differentiation of germ tubes. Interestingly, Δznf1 mutants also produce significantly more conidia compared with the isogenic wild-type strain. Quantitative reverse-transcription polymerase chain reaction analysis and green fluorescent protein fusion experiments revealed that expression of ZNF1 was highly induced during germination and appressorium development in M. oryzae and potentially regulated by the Pmk1 mitogen-activated protein kinase pathway. We observed that Δznf1 mutants are affected in mitosis and impaired in mobilization and degradation of lipid droplets and glycogen reserves during appressorium differentiation. Site-directed mutagenesis confirmed that three of the four C2H2 zinc-finger domains are essential for the function of Znf1. Taken together, we conclude that a C2H2 zinc-finger TF encoded by ZNF1 is essential for appressorium development by the rice blast fungus.