GPD regulatory sequences were used to express a phleomycin resistance gene (Sh ble) in Schizophyllum commune, resulting in high numbers of phleomycin-resistant transformants. Attempts to express heterologous genes coding for hygromycin B phosphotransferase (hph), aminoglycoside phosphotransferase (apt), β-glucuronidase (uidA) and β-galactosidase (lacZ) using the same regulatory sequences were not successful and no mRNA could be detected. Cloning the hph and uidA genes in an internally deleted GPD gene resulted in truncated transcripts which ended within the 5'-parts of the heterologous genes. Cloning of the same genes as transcriptional fusions downstream from the Sh ble gene also resulted in truncated transcripts ending in the 5'-parts of these heterologous genes. It is suggested that AT-rich sequences in heterologous genes might be involved in generating these truncated transcripts, thereby preventing expression in S. commune.