The Schizophyllum commune SC3 gene, which encodes a hydrophobin that coats aerial hyphae, is expressed in both monokaryons and dikaryons. The dikaryons were formed by mating two monokaryons with different MAT A and MAT B genes, leading to activation of the MATA - and MAT B-controlled pathways ( MAT A-on and MAT B-on). In contrast to the monokaryons, the dikaryons also expressed other hydrophobin genes ( SC1, SC4 ) as well as a gene ( SC7 ) encoding a hydrophilic wall protein. None of these four genes was expressed in MAT A-off MAT B-on mycelia, indicating that MAT B-on represses SC3 and that both MAT A-on and MAT B-on are required for activation of SC1 , SC4 and SC7 . In fruiting dikaryons, immunolabelling revealed that SC3p was produced by aerial hyphae but not by hyphae that constitute the fruit-body tissue. In contrast to aerial hyphae, the latter produced dikaryon-specific transcripts and secreted SC7p into the extracellular matrix of the tissue. This suggests that in the aerial hyphae of the dikaryon the MAT B-on pathway was not effective ( MAT B-off). We observed that in these aerial hyphae the two nuclei were wider apart than in a typical dikaryon. Although other explanations are not ruled out, we tentatively propose that effective interaction of different MAT B genes requires proximity of the two nuclei containing these genes, and that disruption of this binucleate state represents a novel mechanism of gene control for spatial cell differentiation in the secondary mycelium.