The fluffy gene of Neurospora crassa is required for asexual sporulation. It encodes an 88 kDa polypeptide containing a typical fungal Zn2Cys6 DNA binding motif. To identify the target genes on which FL may act, I sought to identify target sequences to which the FL protein binds. Several strategies were attempted to obtain purified FL protein. Purification was achieved by expressing the DNA binding domain of FL in Escherichia coli as a fusion with glutathione S-transferase followed by affinity purification using glutathione sepharose chromatography. DNA binding sites were selected by in vitro binding assays. Comparison of the sequences of selected clones suggested that FL binds to the motif 5??-CGG(N)9CCG-3??. A potential binding site was found in the promoter region of the eas (ccg-2) gene, which encodes a fungal hydrophobin. In vitro competitive binding assays revealed a preferred binding site for FL in the eas promoter, 5??-CGGAAGTTTCCTCCG-3??, which is located 1498 bp upstream of the eas translation initiation codon. In vivo experiments using a foreign DNA sequence tag confirmed that this sequence is a target site for FL regulation. Using Saccharomyces cerevisiae as an experimental system, I demonstrated that the C-terminal portion of FL functions in transcriptional activation. Microarray analysis was performed to study the role of fl in gene regulation on a large scale. mRNA levels in a fl mutant were compared to those in a strain overexpressing the fl gene. Experiments with cDNA microarray containing 13% of the total number of predicted N. crassa genes revealed 122 genes differentially expressed in response to overexpression of fl. Among these, eas displayed the greatest level of response. The cDNA microarray approach also revealed a number of genes that may be indirectly regulated by fl but may be involved in development. This information provides a foundation for further analysis of the role of fl in conidial development.