The cellulase and hemicellulase genes of the filamentous fungus Trichoderma reesei have been shown to be under carbon catabolite repression mediated by the regulatory gene cre1. In this study, strains were constructed in which the cre1 gene was either completely removed or replaced by a truncated mutant variant, cre1-1, found previously in the Rut-C30 mutant strain with enhanced enzyme production capability. The T. reesei transformants with either deletion or truncation of cre1 had clearly altered colony morphology compared with the parental strains, forming smaller colonies and fewer aerial hyphae and spores. Liquid cultures in a medium with glucose as a carbon source showed that the transformants were derepressed in cellulase and hemicellulase production. Interestingly, they also produced significantly elevated levels of these hydrolytic enzymes in fermentations carried out in a medium inducing the hydrolase genes. This suggests that cre1 acts as a modulator of cellulase and hemicellulase gene expression under both noninducing and inducing conditions. There was no phenotypic difference between the Deltacre1 and cre1-1 mutant strains in any of the experiments done, indicating that the cre1-1 gene is practically a null allele. The results of this work indicate that cre1 is a valid target gene in strain engineering for improved enzyme production in T. reesei.