Upon encountering a leaf surface, emergent germ tubes from conidia of the rice blast fungus, Magnaporthe grisea, form infection structures called appressoria that allow direct penetration of plant cells. The MPG1 gene encodes a fungal hydrophobin of M. grisea that is expressed during development of aerial hyphae, conidia, and appressoria. Deletion of MPG1 reduces the efficiency of appressorium formation. We found that yeast extract repressed MPG1 expression in vitro and inhibited appressorium development of the rice pathogen, strain Guy11. Appressorium formation of mpg1 mutants is rescued in trans by coinoculation with wild-type cells. MPG1 is required for efficient induction of appressoria in response to a host surface or highly hydrophobic artificial substrates. However, we identified several artificial substrates that can support efficient appressorium formation of mpg1 strains. This finding suggests that Mpg1p is not specifically required for appressorium formation, but is involved in the interaction with, and recognition of, the host surface. Additionally, a time window of competence to form appressoria was identified; the decision to form appressoria occurs approximately 6 to 8 h following conidial germination. After this critical time, cells are no longer able to form appressoria in response to inductive cues. These studies indicate that MPG1 hydrophobin is required for host recognition and that it acts as a morphogenetic signal for cellular differentiation.