rgb-1, encoding the tentative B regulatory subunit of the type 2A Ser/Thr phosphatase in Neurospora crassa, was isolated from cDNA and genomic libraries. Based on analysis of cDNA and genomic clones, rgb-1 is 3387 nucleotides in length, contains seven putative introns and encodes a 461-amino-acid polypeptide. Intron I, which is 5' to the presumed translation initiation codon, contains a uORF encoding 34 amino acids. Intron VI undergoes alternative splicing. Inactivation of rgb-1 by the repeat-induced point (RIP) mutation procedure produced progeny that grow slowly, have abnormal hyphal morphology, are female sterile and produce abundant amounts of arthroconidia. The rgb-1(RIP) strain does not produce major constriction chains or mature macroconidia. Minor constriction chains are formed, yet the growth process reverts to hyphal elongation. Microscopic and genetic analyses indicate that rgb-1 is a regulator of the budding subroutine of the macroconidiation process and that arthroconidiation, which shares common early and late events with macroconidiation, is induced as a default mechanism for asexual reproduction in this fungus.