The basidiomycete Ustilago maydis, the causative agent of corn smut disease, has emerged as a model organism for dimorphism and fungal phytopathogenicity. In this work, we line out the key conserved enzymes for beta-carotene biosynthesis encoded by the U. maydis genome and show that this biotrophic fungus accumulates beta-carotene. The amount of this pigment depended on culture pH and aeration but was not affected by light and was not increased by oxidative stress. Moreover, we identified the U. maydis gene, cco1, encoding a putative beta-carotene cleavage oxygenase. Heterologous overexpression and in vitro analyses of purified enzyme demonstrated that Cco1 catalyzes the symmetrical cleavage of beta-carotene to yield two molecules of retinal. Analyses of beta-carotene and retinal contents in U. maydiscco1 deletion and over-expression strains confirmed the enzymatic function of Cco1, and revealed that Cco1 determines the beta-carotene content. Our data indicate that carotenoid biosynthesis in U. maydis is carried out to provide retinal rather than to deliver protective pigments. The U. maydis genome also encodes three potential opsins, a family of photoactive proteins that use retinal as chromophore. Two opsin genes showed different light-regulated expression patterns, suggesting specialized roles in photobiology, while no mRNA was detected for the third opsin gene in the same experiments. However, deletion of the cco1 gene, which should abolish function of all the retinal-dependent opsins, did not affect growth, morphology or pathogenicity, suggesting that retinal and opsin proteins play no relevant role in U. maydis under the tested conditions.