Pseudomonas tolaasii, the causal agent of brown blotch disease of Agaricus bisporus, spontaneously gives rise to morphologically distinct stable sectors, referred to as the phenotypic variant form, at the margins of the wild-type colonies. The phenotypic variant form is nonpathogenic and differs from the wild type in a range of biochemical and physiological characteristics. A genomic cosmid clone (pSISG29) from a wild-type P. tolaasii library was shown to be capable of restoring a range of characteristics of the phenotypic variant to those of the wild-type form, when present in trans. Subcloning and saturation mutagenesis analysis with Tn5lacZ localized a 3.0-kb region from pSISG29, designated the pheN locus, required for complementation of the phenotypic variant to the wild-type form. Marker exchange of the Tn5lacZ-mutagenized copy of the pheN locus into the wild-type strain demonstrated that a functional copy of the pheN gene is required to maintain the wild-type pathogenic phenotype and that loss of the pheN gene or its function results in conversion of the wild-type form to the phenotypic variant form. The pheN locus contained a 2,727-bp open reading frame encoding an 83-kDa protein. The predicted amino acid sequence of the PheN protein showed homology to the sensor and regulator domains of the conserved family of two component bacterial sensor regulator proteins. Southern hybridization analysis of pheN genes from the wild type and the phenotypic variant form revealed that DNA rearrangement occurs within the pheN locus during phenotypic variation. Analysis of pheN expression with a pheN::lacZ fusion demonstrated that expression is regulated by environmental factors. These results are related to a model for control for phenotypic variation in P. tolaasii.