Filamentous fungi differentiate along complex developmental programs directed by abiotic and biotic signals. Currently, intrinsic signals that govern fungal development remain largely unknown. Here we show that an endogenously produced and secreted fungal oxylipin, 5,8-diHODE, induces fungal cellular differentiation, including lateral branching in pathogenic Aspergillus fumigatus and Aspergillus flavus, and appressorium formation in the rice blast pathogen Magnaporthe grisea. The Aspergillus branching response is specific to a subset of oxylipins and is signaled through G-protein coupled receptors. RNA-Seq profiling shows differential expression of many transcription factors in response to 5,8-diHODE. Screening of null mutants of 33 of those transcription factors identifies three transcriptional regulators that appear to mediate the Aspergillus branching response; one of the mutants is locked in a hypo-branching phenotype, while the other two mutants display a hyper-branching phenotype. Our work reveals an endogenous signal that triggers crucial developmental processes in filamentous fungi, and opens new avenues for research on the morphogenesis of filamentous fungi.