A homolog of the major nitrogen regulatory genes areA from Aspergillus nidulans and nit-2 from Neurospora crassa was isolated from the zoophilic dermatophyte, Microsporum canis. This gene, dnr1, encodes a polypeptide of 761 amino acid residues containing a single zinc-finger DNA-binding domain, which is almost identical in amino acid sequence to the zinc-finger domains of AREA and NIT-2. The functional equivalence of dnr1 to areA was demonstrated by complementation of an areA loss-of-function mutant of A. nidulans with dnr1 cDNA. To further characterize this gene, dnr1 was disrupted by gene replacement based on homologous recombination. Of 100 transformants analyzed, two showed the results expected for replacement of dnr1. The growth properties of the two dnr1(-) mutant strains on various nitrogen sources were examined. Unlike the A. nidulansareA(-) mutant, these dnr1(-) mutants showed significantly reduced growth on ammonia, a preferred nitrogen source for fungi. These mutant strains were also able to utilize various amino acids for growth. In comparison with wild-type M. canis, the two dnr1(-) mutants showed reduced growth on medium containing keratin as the sole nitrogen source. This is the first report describing successful production of targeted gene-disrupted mutants by homologous recombination and their phenotypic analysis in dermatophytes.