During sexual development, Neurospora crassa inactivates genes in duplicated DNA segments by a hypermutation process, repeat-induced point mutation (RIP). RIP introduces C:G to T:A transition mutations and creates targets for subsequent DNA methylation in vegetative tissue. The mechanism of RIP and its relationship to DNA methylation are not fully understood. Mutations in DIM-2, a DNA methyltransferase (DMT) responsible for all known cytosine methylation in Neurospora, does not prevent RIP. We used RIP to disrupt a second putative DMT gene in the Neurospora genome and tested mutants for defects in DNA methylation and RIP. No effect on DNA methylation was detected in the tissues that could be assayed, but the mutants showed recessive defects in RIP. Duplications of the am and mtr genes were completely stable in crosses homozygous for the mutated potential DMT gene, which we call rid (RIP defective). The same duplications were inactivated normally in heterozygous crosses. Disruption of the rid gene did not noticeably affect fertility, growth, or development. In contrast, crosses homozygous for a mutation in a related gene in Ascobolus immersus, masc1, reportedly fail to develop and heterozygous crosses reduce methylation induced premeiotically [Malagnac, F., Wendel, B., Goyon, C., Faugeron, G., Zickler, D., et al. (1997) Cell 91, 281-290]. We isolated homologues of rid from Neurospora tetrasperma and Neurospora intermedia to identify conserved regions. Homologues possess all motifs characteristic of eukaryotic DMTs and have large distinctive C- and N-terminal domains.