To identify a suitable promoter for use in engineering fungal entomopathogens to improve heterologous gene expression and fungal biocontrol potential, a 1798 bp promoter (Phyd1) upstream of Beauveria bassiana class I hydrophobin gene (hyd1) was optimized by upstream truncation and site-directed mutation. A truncated 1290 bp fragment (Phyd1-t1) drove eGFP expression in B. bassiana much more efficiently than full-length Phyd1. Further truncating Phyd1-t1 to 1179, 991 and 791 bp or mutating one of the binding domains of three transcription factors in Phyd1-t1 reduced significantly the expression of eGFP (enhanced green fluorescence protein). Under Phyd1-t1 control, eGFP was expressed more abundantly in conidiogenic cells and conidia than in mycelia. Therefore, Phyd1-t1 was used to integrate a bacterium-derived, insect midgut-specific toxin (vip3Aa1) gene into B. bassiana, yielding a transgenic strain (BbHV8) expressing 9.8-fold more toxin molecules in conidia than a counterpart strain (BbV28) expressing the toxin under the control of PgpdA, a promoter widely used for gene expression in fungi. Consequently, BbHV8 showed much higher per os virulence to Spodoptera litura larvae than BbV28 in standardized bioassays with normal conidia for both cuticle penetration and ingestion or heat-killed conidia for ingestion only. Conclusively, Phyd1-t1 is a useful tool for enhancing beneficial protein expression, such as vip3Aa1, in fungal conidia, which are the active ingredients of mycoinsecticides.