The fission yeasts (Schizosaccharomyces) representing a highly divergent phylogenetic branch of Fungi evolved from filamentous ancestors by gradual transition from mycelial growth to yeast morphology. For the transition, a mechanism had been developed that separates the sister cells after the completion of cytokinesis. Numerous components of the separation mechanism have been characterised in Schizosaccharomycespombe, including the zinc-finger transcription factor Ace2p and the fork-head transcription factor Sep1p. Here we show that both regulators have regions conserved within the genus. The most conserved parts contain the DNA-binding domains whose amino-acid sequences perfectly reflect the phylogenetic positions of the species. The less conserved parts of the proteins contain sequence blocks specific for the whole genus or only for the species propagating predominantly or exclusively as yeasts. Inactivation of either gene in the dimorphic species Schizosaccharomycesjaponicus abolished cell separation in the yeast phase conferring hypha-like morphology but did not change the growth pattern to unipolar and did not cause extensive polar vacuolation characteristic of the true mycelium. Neither mutation affected the mycelial phase, but both mutations hampered the hyphal fragmentation at the mycelium-to-yeast transition. Ace2p(Sj) acts downstream of Sep1p(Sj) and regulates the orthologues of the Ace2p-dependent S.pombe genes agn1(+) (1,3-alpha-glucanase) and eng1(+) (1,3-beta-glucanase) but does not regulate the orthologue of cfh4(+) (chitin synthase regulatory factor). These results and the complementation of the cell separation defects of the ace2(-) and sep1(-) mutations of S.pombe by heterologously expressed ace2(Sj) and sep1(Sj) indicate that the cell separation mechanism is conserved in the Schizosaccharomyces genus.