Aims: To clone and characterize genes from the mycotoxigenic fungus, Fusarium verticillioides, which are associated with its ability to biotransform allelopathic benzoxazolinones produced by maize, wheat, and rye. Methods and Results: Suppression subtractive hybridization identified F. verticillioides genes up-regulated in response to 2-benzoxazolinone (BOA), including a cluster of genes along chromosome 3. One of these genes, putatively encoding an arylamine N-acetyltransferase (NAT), was highly represented in the subtracted library and was of particular interest since previous analyses identified the FDB2 locus as possibly encoding transferase activity. The gene was subcloned and complemented a natural fdb2 mutant. Conversely, disruption of the gene eliminated the ability of F. verticillioides to metabolize BOA. Other genes in the cluster also were assessed using a complementation assay. Metabolic profiles of fdb2 mutants suggest that minor acylation activity occurred independently of the NAT activity encoded by FDB2. Conclusions: The previously defined FDB2 locus was functionally associated with the gene encoding putative NAT activity, and the FDB2 gene was essential for biotransformation of BOA. The flanking gene FDB3 encodes a putative Zn(II)2Cys6 transcription factor and contributes to efficient BOA biotransformation but was not essential. Significance and Impact of the Study: Biotransformation of benzoxazolinones by F. verticillioides may enhance its ecological fitness in maize field environments and our results provide greater understanding of the genes that modulate the biotransformation process. Additionally, this is the first homologue of the NAT gene family to be characterized in a filamentous fungus.