Thearg2gene which encodes the small subunit of carbamoyl phosphate synthetase forTrichoderma virenshas been cloned and used to develop a homologous transformation system. A genomic clone containing thearg2gene was isolated from a cosmid library ofT. virensbased on complementation of anarginineauxotrophic mutant of this fungus. The predicted amino acid sequence of thearg2gene shows 56–82% identity with homologous polypeptides from other fungi. It also contains an upstream open reading frame which encodes 24 amino acids. As is observed with other gene sequences encoding this polypeptide in filamentous fungi, the N-terminus of the predicted polypeptide showed characteristic features of a mitochondrial signal sequence. Thearg2gene was used for genetic transformation ofT. virensin frequencies of up to 370 transformants/μg of DNA. Heat-shock treatment ofT. virensprotoplasts increased the transformation frequency by fivefold, but more than 85% of the transformants were abortive. Both single-copy, homologous integration events and ectopic, non-homologous integration events were detected by Southern analyses of genomic DNA from transformed strains.