A single 3 kb segment of double-stranded (dsRNA) was present in three of 30 Brazilian isolates of Cryphonectria cubensis. These dsRNA-containing isolates showed morphological characteristics suggestive of hypovirulence and were significantly less virulent than dsRNA-free isolates. One isolate, however, with morphological characteristics suggestive of hypovirulence, showed reduced virulence, but was free from dsRNA. Conversion of virulent isolates with normal morphology to a morphology associated with hypovirulence was achieved by pairing hypovirulent and virulent isolates of the same vegetative compatibility group (VCG). This suggests that dsRNA can be transmitted to isolates of the same vegetative compatibility group by hyphal anastomosis. Converted isolates exhibited the same hypovirulence-associated traits as those of the original dsRNA-containing hypovirulent isolates. These studies suggest that a single 3 kb segment of dsRNA alters both morphology and virulence by conferring hypovirulence on the pathogen; the first such report for Brazilian isolates of C. cubensis.