Head blight or scab disease caused by Fusarium graminearum poses a major threat to wheat and barley production in North America and other countries. To better understand the molecular mechanisms of F. graminearum pathogenesis, we have generated a collection of random insertional mutants. In mutant 222, one of the transformants significantly reduced in virulence, the transforming vector was inserted at amino acid 269 of the hydroxymethyl-glutaryl CoA reductase gene (HMR1) that encodes a key enzyme in sterol and isoprenoid biosynthesis. The N-terminal transmembrane domains of HMR1 were disrupted, but the C-terminal catalytic domain was intact in mutant 222. We failed to isolate mutants deleted of the HMR1 gene, suggesting that HMR1 is an essential gene. Mutants deleted of the N-terminal 254 amino acids of HMR1 were viable and phenotypically similar to mutant 222. In both mutant 222 and the hmr1Delta254 mutants, a 3-kb truncated HMR1 transcript was detectable by northern blot analyses. In the wild-type strain, only the 5-kb messenger was observed. The initiation site of truncated HMR1 transcripts was determined by 5'-RACE to be 507bp upstream from the catalytic subunit. When a HMR1 fragment corresponding to the DNA sequence of HMR1269-641 was translationally fused to a promoter-less GFP construct, green fluorescent signals were detectable in vegetative hyphae of the resulting transformants. These data indicate that this region of HMR1 ORF has cryptic promoter activity and can express the catalytic domain in hmr1 mutants deleted of its N-terminal portion. Our results also illustrate the importance of the HMR1 gene and the function of its transmembrane domains in F. graminearum.