A protein synthesis inhibitor, cycloheximide, induces excretion of laccase in Neurospora crassa. The lah-1 mutation results in excretion of a large amount of laccase even in the absence of cycloheximide. Ten mutations were induced that suppress derepressed excretion of laccase in the lah-1 mutant. Of these, seven second-site mutations were found to confer a laccase-noninducible phenotype, and were classified into two different complementation groups. Four mutations define a locus designated lni-1, found to be closely linked to ylo-1 on linkage group VI. The other three mutations were mapped to second locus, designated lni-2, that lies between nic-3 and thi-3 on linkage group VII. The lni-2 locus was shown to encode laccase by RFLP mapping of the DNA fragment encoding laccase and by transformation of the lni-2 mutant with plasmid pBL1 carrying the laccase gene (the locus encoding laccas is hereafter described as lacc). All lacc mutants examined (whether mutagen-induced or inactivated by repeat-induced point mutation) appeared to exhibit no phenotypic deficiency during both asexual and sexual cycles, suggesting that the laccase gene is dispensable in N. crassa. Northern analysis of total cellular RNA from the four lni-1 mutants demonstrated that the lni-1 mutations abolish increased transcription of the laccase gene under inducing conditions. Consequently, the lni-1 locus is inferred to encode a trans-acting positive regulator required for transcriptional activation of the laccase gene in response to cycloheximide. Possible functions of the lah-1 gene are also described.