The fungal pathogen Ustilago maydis alternates between budding and filamentous growth during its life cycle. This dimorphic transition is regulated by environmental factors and mating. We cloned a new gene, crk1, which encodes a protein with sequence similarity to Ime2, a kinase involved in developmental choices in S. cerevisiae. Disruption of the crk1 gene in U. maydis resulted in cells that are unable to respond in an appropriate manner to environmental stimuli and show defects in morphogenesis and cell cycle adjustment to changing conditions. We have analysed the regulation of the crk1 gene and demonstrated that cAMP and MAPK pathways have opposite influences on the transcript levels for crk1. Furthermore, we have shown that alterations in the components of these pathways impair the ability of the cellular machinery to adapt to changing conditions. These results demonstrate an important role for the crk1- encoded protein in the morphogenesis and environmental adaptation in Ustilago maydis.