The high osmolarity glycerol (HOG) pathway plays important role in Metarhizium rileyi microsclerotia (MS) development. To investigate how M. rileyi transduce growth stress and regulate MS development via mitogen-activated protein kinase kinase (MAPKK) Pbs2, phenotypic characterization of the yeast Pbs2 homolog were performed. Expression of pbs2 peaked when MS formation occurred day 3 in liquid amended medium. Compared with wild-type and complemented strains, deletion mutant of pbs2 (Δpbs2) delayed dimorphic switch and vegetative growth, displayed sensitivities to various stress, and significantly reduced conidial (98%) and MS (40%) yields. Furthermore, transcription analysis showed that other genes of HOG signaling pathway were down-regulated in Δpbs2 mutants. Insect bioassays revealed that Δpbs2 mutants had decreased virulence levels in topical (24%) and injection (53%) bioassays. This study confirmed that Pbs2 play important roles in colony morphology, conidiation, stresses response and MS development in M. rileyi.