Analysis of predicted fungal proteomes revealed a large family of sequences that showed similarity to the Saccharomyces cerevisiae Class-I dihydroorotate dehydrogenase Ura1, which supports synthesis of pyrimidines under aerobic and anaerobic conditions. However, expression of codon-optimised representatives of this gene family, from the ascomycete Alternaria alternata and the basidiomycete Schizophyllum commune, only supported growth of an S. cerevisiae ura1Δ mutant when synthetic media were supplemented with dihydrouracil. A hypothesis that these genes encode NAD(P)⁺-dependent dihydrouracil dehydrogenases (EC 1.3.1.1 or 1.3.1.2) was rejected based on absence of complementation in anaerobic cultures. Uracil- and thymine-dependent oxygen consumption and hydrogen-peroxide production by cell extracts of S. cerevisiae strains expressing the A. alternata and S. commune genes showed that, instead, they encode active dihydrouracil oxidases (DHO, EC1.3.3.7). DHO catalyses the reaction dihydrouracil + O₂ → uracil + H₂O₂ and was only reported in the yeast Rhodotorula glutinis (Owaki in J Ferment Technol 64:205–210, 1986). No structural gene for DHO was previously identified. DHO-expressing strains were highly sensitive to 5-fluorodihydrouracil (5F-dhu) and plasmids bearing expression cassettes for DHO were readily lost during growth on 5F-dhu-containing media. These results show the potential applicability of fungal DHO genes as counter-selectable marker genes for genetic modification of S. cerevisiae and other organisms that lack a native DHO. Further research should explore the physiological significance of this enigmatic and apparently widespread fungal enzyme.