The biological function of the extracellular laccase (Laccase 1) of Cryphonectria parasitica was investigated by deletion of Lacl using recombinant DNA techniques. Lacl is one of the genes of this fungus which is down-regulated by the hypovirulence-causing dsRNA virus, CHV1. This virus causes a variety of symptoms of the fungus, including hypovirulence, reduced sporulation, and reduced pigmentation. A transforming vector for gene deletion was constructed by replacing the structural gene of laccase with the hygromycin B resistance gene (hph) from Es-cherichia coli. The Lacl null mutation was found to have no effect on fungal virulence, pigmentation, conidiation, conidial germination, or sexual crossing capability. A previously unknown inducible extracellular laccase, however, was detected when the mutant strain was grown in tannic acid. The observed lack of phenotype associated with deletion of Lacl may be the result of compensation by this newly discovered extracellular laccase.