Botrytis cinerea is an aggressive plant pathogen causing gray mold disease on various plant species. In this study, we identified the genetic origin for significantly differing phenotypes of the two sequenced B. cinerea isolates, B05.10 and T4, with regard to light-dependent differentiation, oxalic acid (OA) formation and virulence. By conducting a map-based cloning approach we identified a single nucleotide polymorphism (SNP) in an open reading frame encoding a VELVET gene (bcvel1). The SNP in isolate T4 results in a truncated protein that is predominantly found in the cytosol in contrast to the full-length protein of isolate B05.10 that accumulates in the nuclei. Deletion of the full-length gene in B05.10 resulted in the T4 phenotype, namely light-independent conidiation, loss of sclerotial development and oxalic acid production, and reduced virulence on several host plants. These findings indicate that the identified SNP represents a loss-of-function mutation of bcvel1. In accordance, the expression of the B05.10 copy in T4 rescued the wild-type/B05.10 phenotype. BcVEL1 is crucial for full virulence as deletion mutants are significantly hampered in killing and decomposing plant tissues. However, the production of the two best known secondary metabolites, the phytotoxins botcinic acid and botrydial, are not affected by the deletion of bcvel1 indicating that other factors are responsible for reduced virulence. Genome-wide expression analyses of B05.10- and Δbcvel1-infected plant material revealed a number of genes differentially expressed in the mutant: while several protease- encoding genes are under-expressed in Δbcvel1 compared to the wild type, the group of over-expressed genes is enriched for genes encoding sugar, amino acid and ammonium transporters and glycoside hydrolases reflecting the response of Δbcvel1 mutants to nutrient starvation conditions.