Ustilago maydis is a basidiomycete fungus that exhibits a yeast-like and a filamentous form. Growth of the fungus in the host leads to additional morphological transitions. The different morphologies are characterized by distinct nuclear movements. Dynein and alpha-tubulin are required for nuclear movements and for cell morphogenesis of the yeast-like form. Lis1 is a microtubule plus-end tracking protein (+TIPs) conserved in eukaryotes and required for nuclear migration and spindle positioning. Defects in nuclear migration result in altered cell fate and aberrant development in metazoans, slow growth in fungi and disease in humans (e.g. lissencephaly). Here we investigate the role of the human LIS1 homolog in U. maydis and demonstrate that it is essential for cell viability, not previously seen in other fungi. With a conditional null mutation we show that lis1 is necessary for nuclear migration in the yeast-like cell and during the dimorphic transition. Studies of asynchronous exponentially growing cells and time-lapse microscopy uncovered novel functions of lis1: It is necessary for cell morphogenesis, positioning of the septum and cell wall integrity. lis1-depleted cells exhibit altered axes of growth and loss of cell polarity leading to grossly aberrant cells with clusters of nuclei and morphologically altered buds devoid of nuclei. Altered septum positioning and cell wall deposition contribute to the aberrant morphology. lis1-depleted cells lyse, indicative of altered cell wall properties or composition. We also demonstrate, with indirect immunofluorescence to visualize tubulin, that lis1 is necessary for the normal organization of the microtubule cytoskeleton: lis1-depleted cells contain more and longer microtubules that can form coils perpendicular to the long axis of the cell. We propose that lis1 controls microtubule dynamics and thus the regulated delivery of vesicles to growth sites and other cell domains that govern nuclear movements.