Light is an essential factor for pigment formation and fruit body development in Cordyceps militaris, a well-known edible and medicinal fungus. Cmwc-1, a homolog of the blue-light receptor gene white collar-1 (wc-1) in Neurospora crassa, was cloned from the C. militaris genome in our previous study. Here, Cmwc-1 gene inactivation results in thicker aerial hyphae, disordered fruit body development, a significant reduction in conidial formation, and carotenoid and cordycepin production. These characteristics were restored when the Delta Cmwc-1 strains were hybridized with wild-type strains of the opposite mating type. A genome-wide expression analysis revealed that there were 1042 light-responsive genes in the wild-type strain and only 458 in the Delta Cmwc-1 strain. Among five putative photoreceptors identified, Vivid, cryptochrome-1, and cyclobutane pyrimidine dimer photolyase are strongly induced by light in a Cmwc-1-dependent manner, while phytochrome and cryptochrome-2 were not induced. The transcription factors involved in the fungal light reaction were mainly of the Zn(2)Cys(6) type. CmWC-1 regulates adenylosuccinate synthase, an important enzyme for adenosine de novo synthesis, which could explain the reduction in cordycepin production. Some G protein-coupled receptors that control fungal fruit body formation and the sexual cycle were regulated by CmWC-1, and the cAMP pathway involved in light signal transduction in N. crassa was not critical for the photoreaction in the fungus here. A transcriptional analysis indicated that steroid biosynthesis was more active in the Delta Cmwc-1 strain, suggesting that CmWC-1 might switch the vegetative growth state to primordia differentiation by suppressing the expression of related genes.