The formation of the Aspergillus nidulans fruiting body is affected by a number of genetic and environmental factors. Here, the nsdC (never in sexual development) gene-encoding a putative transcription factor carrying a novel type of zinc-finger DNA-binding domain consisting of two C 2 H 2 's and a C 2 HC motif that are highly conserved in most fungi but not in plants or animals-was investigated. Two distinct transcripts of 2.6 and 3.0 kb were generated from nsdC. The 2.6-kb mRNA accumulated differentially in various stages of growth and development, while the level of the 3.0-kb mRNA remained relatively constant throughout the life cycle. While the deletion of nsdC resulted in the complete loss of fruiting body formation under all conditions favoring sexual development, overexpression of nsdC not only enhanced formation of fruiting bodies (cleistothecia) but also overcame inhibitory effects of certain stresses on cleistothecial development, implying that NsdC is a key positive regulator of sexual development. Deletion of nsdC also retarded vegetative growth and hyperactive asexual sporulation, suggesting that NsdC is necessary not only for sexual development but also for regulating asexual sporulation negatively. Overexpression of veA or nsdD does not rescue the failure of fruiting body formation caused by nsdC deletion. Furthermore, nsdC expression is not affected by either VeA or NsdD, and vice versa, indicating that NsdC regulates sexual development independently of VeA or NsdD.