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Heterokaryon incompatibility (HI) is a nonself recognition phenomenon occurring in filamentous fungi that is important for limiting resource plundering and restricting viral transfer between strains. Nonself recognition and HI occurs during hyphal fusion between strains that differ at het loci. If two strains undergo hyphal fusion, but differ in allelic specificity at a het locus, the fusion cell is compartmentalized and undergoes a rapid programmed cell death (PCD). Incompatible heterokaryons show a macroscopic phenotype of slow growth and diminished conidiation, and a microscopic phenotype of hyphal compartmentation and cell death. To understand processes associated with HI and PCD, we used whole-genome microarrays for Neurospora crassa to assess transcriptional differences associated with induction of HI mediated by differences in het-c pin-c haplotype. Our data show that HI is a dynamic and transcriptionally active process. The production of reactive oxygen species is implicated in the execution of HI and PCD in N. crassa, as are several genes involved in phosphatidylinositol and calcium signalling pathways. However, genes encoding mammalian homologues of caspases or apoptosis-inducing factor (AIF) are not required for HI or programmed cell death. These data indicate that PCD during HI occurs via a novel and possibly fungal-specific mechanism, making this pathway an attractive drug target for control of fungal infections.