The A mating type genes of the mushroom Coprinus cinereus encode two classes of putative transcription factor with distinctive homeodomain motifs (HD1 and HD2). A successful mating brings together different allelic forms of these genes and this triggers part of a developmental sequence required for sexual reproduction. In this report we provide evidence that this developmental programme is promoted by a physical interaction between the two classes of homeodomain protein. Rare dominant mutations conferring self-compatibility map to the A locus and result in constitutive operation of the A-regulated developmental pathway. Our molecular analysis of one of these mutations shows that it has generated a chimeric gene by inframe fusion of an HD2 and an HD1 gene. Fusion has overcome the normal incompatibility between two proteins coded by genes of the same A locus and generated a protein that is sufficient to promote development in the absence of any other active A mating type genes. The fusion protein retains most of the HD2 sequence, but only the C-terminal part of the HD1 protein. It has only the HD2 homeodomain motif as a potential DNA binding domain fused to an essential C-terminal region of the HD1 protein, which in a normal HD1-HD2 protein complex may be the major activation domain.