The heterodisaccharide lactose (1,4-O-beta-D-galactopyranosyl-D-glucose) induces cellulase formation in the ascomycete Hypocrea jecorina (= Trichoderma reesei). Lactose assimilation is slow, and the assimilation of its beta-D-galactose moiety depends mainly on the operation of a recently described reductive pathway and depends less on the Leloir pathway, which accepts only alpha-D-galactose. We therefore reasoned whether galactomutarotase [aldose 1-epimerase (AEP)] activity might limit lactose assimilation and thus influence cellulase formation. We identified three putative AEP-encoding genes (aep1, aep2, aep3) in H. jecorina, of which two encoded intracellular protein (AEP1 and AEP2) and one encoded an extracellular protein (AEP3). Although all three were transcribed, only the aep3 transcript was detected on lactose. However, no mutarotase activity was detected in the mycelia, their cell walls, or the extracellular medium during growth on lactose. Therefore, the effect of galactomutarotase activity on lactose assimilation was studied with H. jecorina strains expressing the C-terminal galactose mutarotase part of the Saccharomyces cerevisiae Gal10. These strains showed increased growth on lactose in a gene copy number-dependent manner, although their formation of extracellular beta-galactosidase activity and transcription of the genes encoding the first steps in the Leloir and the reductive pathway was similar to the parental strain QM9414. Cellulase gene transcription on lactose dramatically decreased in these strains, but remained unaffected during growth on cellulose. Our data show that cellulase induction in H. jecorina by lactose requires the beta-anomer of D-galactose and reveal the lack of mutarotase activity during growth on lactose as an important key for cellulase formation on this sugar.