The vascular wilt fungus Verticillium dahliae produces persistent resting structures, known as microsclerotia, which are important for this plant pathogen's long-term survival. Previously, we identified a hydrophobin gene (VDH1) that is necessary for microsclerotial production. The current study of VDH1's expression, and its regulation, was undertaken to provide insight into the largely uncharacterized molecular mechanisms relevant to microsclerotial development. Reporter gene analysis showed that VDH1 is specifically expressed in developing microsclerotia, as well as in hyphal fusions and conidiophores, suggesting that VDH1 mediates the development of microsclerotia from conidiophores and other hyphal structures. We report also on the effects of nutrient availability on the regulation of microsclerotial development in V. dahliae; the gene's activity appears to be regulated in response to carbon availability. Lastly, constitutive expression of VDH1 results in delayed disease symptom development, but has no noticeable effect on in vitro microsclerotial development.