The nitrate reductase gene (NIA1) of the phytopathogenic fungus Stagonospora (Septoria) nodorum has been cloned from a cosmid library by homologous hybridisation with a PCR-generated probe. A 6. 7-kb fragment carrying the NIA1 gene was subcloned and partially characterised by restriction mapping. Sequencing of the gene indicated a high degree of homology, both at the nucleotide and amino-acid levels, with nitrate reductase genes of other filamentous fungi. Furthermore, consensus regulatory signals thought to be involved in the control of nitrogen metabolism are present in the 5' flanking region. The cloned NIA1 gene has been used to develop a gene-transfer system based on nitrate assimilation. Stable nia1 mutants of S. nodorum defective in nitrate reductase were isolated by virtue of their resistance to chlorate. These were transformed back to nitrate utilisation with the wild-type S. nodorum NIA1 gene. Southern analyses revealed that transformation occurred as a result of the integration of transforming DNA into the fungal genome; in all cases examined, integration was targeted to the homologous sequence.