Oxylipins called psi factors have been shown to alter the ratio of asexual to sexual sporulation in the filamentous fungus Aspergillus nidulans. Analysis of the A. nidulans genome has led to the identification of three fatty acid oxygenases (PpoA, PpoB and PpoC) predicted to produce psi factors. Here, it is reported that deletion of ppoB (DeltappoB) reduced production of the oleic-acid-derived oxylipin psiBbeta and increased the ratio of asexual to sexual spore development. Generation of the triple mutant Delta ppoA Delta ppoB Delta ppoC resulted in a strain deficient in producing oleic- and linoleic-acid-derived 8'-hydroxy psi factor and caused increased and mis-scheduled activation of sexual development. Changes in asexual to sexual spore development were positively correlated to alterations in the expression of brlA and veA, respectively. PpoB and/or its products antagonistically mediate the expression levels of ppoA and ppoC, thus revealing regulatory feedback loops among these three genes. Phylogenetic analyses showed that ppo genes are present in both saprophytic and pathogenic Ascomycetes and Basidiomycetes, suggesting a conserved role for Ppo enzymes in the life cycle of fungi.