The dimorphic fungi Blastomyces dermatitidis and Histoplasma capsulatum cause systemic mycoses in humans and other animals. Forward genetic approaches to generating and screening mutants for biologically important phenotypes have been underutilized for these pathogens. The plant-transforming bacterium Agrobacterium tumefaciens was tested to determine whether it could transform these fungi and if the fate of transforming DNA was suited for use as an insertional mutagen. Yeast cells from both fungi and germinating conidia from B. dermatitidis were transformed via A. tumefaciens by using hygromycin resistance for selection. Transformation frequencies up to 1 per 100 yeast cells were obtained at high effector-to-target ratios of 3,000:1. B. dermatitidis and H. capsulatum ura5 lines were complemented with transfer DNA vectors expressing URA5 at efficiencies 5 to 10 times greater than those obtained using hygromycin selection. Southern blot analyses indicated that in 80% of transformants the transferred DNA was integrated into chromosomal DNA at single, unique sites in the genome. Progeny of B. dermatitidis transformants unexpectedly showed that a single round of colony growth under hygromycin selection or visible selection of transformants by lacZ expression generated homokaryotic progeny from multinucleate yeast. Theoretical analysis of random organelle sorting suggests that the majority of B. dermatitidis cells would be homokaryons after the ca. 20 generations necessary for colony formation. Taken together, the results demonstrate that A. tumefaciens efficiently transfers DNA into B. dermatitidis and H. capsulatum and has the properties necessary for use as an insertional mutagen in these fungi.