Coprinus cinereus has two main types of mycelia, the asexual monokaryon and the sexual dikaryon, formed by fusion of compatible monokaryons. Syngamy (plasmogamy) and karyogamy are spatially and temporally separated, which is typical for basidiomycetous fungi. This property of the dikaryon enables an easy exchange of nuclear partners in further dikaryotic-monokaryotic and dikaryotic-dikaryotic mycelial fusions. Fruiting bodies normally develop on the dikaryon, and the cytological process of fruiting-body development has been described in its principles. Within the specialized basidia, present within the gills of the fruiting bodies, karyogamy occurs in a synchronized manner. It is directly followed by meiosis and by the production of the meiotic basidiospores. The synchrony of karyogamy and meiosis has made the fungus a classical object to study meiotic cytology and recombination. Several genes involved in these processes have been identified. Both monokaryons and dikaryons can form multicellular resting bodies (sclerotia) and different types of mitotic spores, the small uninucleate aerial oidia, and, within submerged mycelium, the large thick-walled chlamydospores. The decision about whether a structure will be formed is made on the basis of environmental signals (light, temperature, humidity, and nutrients). Of the intrinsic factors that control development, the products of the two mating type loci are most important. Mutant complementation and PCR approaches identified further genes which possibly link the two mating-type pathways with each other and with nutritional regulation, for example with the cAMP signaling pathway. Among genes specifically expressed within the fruiting body are those for two galectins, beta-galactoside binding lectins that probably act in hyphal aggregation. These genes serve as molecular markers to study development in wild-type and mutant strains. The isolation of genes for potential non-DNA methyltransferases, needed for tissue formation within the fruiting body, promises the discovery of new signaling pathways, possibly involving secondary fungal metabolites.