The Ser/Thr protein phosphatase Ppt1 (yeast)/PP5 (humans) has been implicated in signal transduction-mediated growth and differentiation, DNA damage/repair, cell cycle progression, and heat shock responses. Little, however, is known concerning the functions of Ppt1/PP5 in filamentous fungi. In this study, the Ppt1 gene MaPpt1 was characterized in the insect pathogenic fungus, Metarhizium acridum. The MaPpt1 protein features a three-tandem tetratricopeptide repeat (TPR) domain and a peptidyl-prolyl cis-trans isomerase-like (PP2Ac) domain. Subcellular localization using an MaPpt1::eGFP fusion protein revealed that MaPpt1 was localized in the cytoplasm of spores, but gathered at the septa in growing hyphae. Targeted gene inactivation of MaPpt1 in M. acridum resulted in unexpected reprogramming of normal aerial conidiation to microcycle conidiation. Although overall vegetative growth was unaffected, a significant increase in conidial yield was noted in MaPpt1. Stress-responsive phenotypes and virulence were largely unaffected in MaPpt1. Exceptionally, MaPpt1 displayed increased UV tolerance compared to wild type. Digital gene expression data revealed that MaPpt1 mediates transcription of sets of genes involved in conidiation, polarized growth, cell cycle, cell proliferation, DNA replication and repair, and some important signaling pathways. These data indicate a unique role for Ppt1 in filamentous fungal development and differentiation.