A single species, Candida albicans, causes half of all invasive fungal infections in humans. Unlike other fungal pathogens, this organism switches between growth as budding yeast and as pseudohyphal and hyphal filaments in host organs and in vitro. Both cell types play a role in invasive disease: while hyphal and pseudohyphal filaments penetrate host cells and tissues, yeast cells are likely to facilitate dissemination through the bloodstream and establishment of distant foci of infection. Many regulators of the yeast-to-hypha switch have emerged from intensive investigations of this morphogenetic step, but the hypha-to-yeast switch remains poorly understood. Using a forward genetic approach, a novel putative regulator involved in the hypha-to-yeast switch was identified, the C. albicans pescadillo homolog, PES1. In eukaryotes from yeast to human, pescadillo homologs are involved in cell cycle control and ribosome biogenesis, and are essential. We find a pescadillo homolog to act in fungal morphogenesis, specifically in lateral yeast growth on filamentous cells. We also find essentiality of PES1 in C. albicans to be dependent on cell type, because hyphal cells, but not yeast cells, tolerate its loss. PES1 is therefore critical for completion of the C. albicans life cycle, in which the fungus switches between filamentous and yeast growth. Consistent with these in vitro findings, PES1 is required for C. albicans virulence in an in vivo insect model of infection.