Sexual development in fungi is controlled by mating type loci that prevent self-fertilization. In the phytopathogenic fungus Ustilago maydis, the b mating type locus encodes two homeodomain proteins, termed bE and bW. After cell fusion, a heterodimeric bE/bW complex is formed if the proteins are derived from different alleles. The bE/bW complex is required and sufficient to initiate pathogenic development and sexual reproduction; for the stages of pathogenic development succeeding plant penetration, however, its role was unclear. To analyse b function during in planta development, we generated a temperature-sensitive bEts protein by exchange of a single amino acid. bEts strains are stalled in pathogenic development at restrictive temperature in planta, and hyphae develop enlarged, bulbous cells at their tips that contain multiple nuclei, indicating a severe defect in the control and synchronization of cell cycle and cytokinesis. DNA array analysis of bEts mutant strains in planta revealed a b-dependent regulation of genes encoding secreted proteins that were shown to influence fungal virulence. Our data demonstrate that in U. maydis the b heterodimer is not only essential to establish the heterodikaryon after mating of two compatible sporidia and to initiate fungal pathogenicity, but also to sustain in planta proliferation and ensure sexual reproduction.