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The rice blast fungus <i>Magnaporthe oryzae</i> has been known to produce the phytohormone auxin/IAA from its hyphae and conidia, but the detailed biological function and biosynthesis pathway is largely unknown. By sequence homology, we identified a complete indole-3-pyruvic acid (IPA)-based IAA biosynthesis pathway in <i>M. oryzae</i>, consisting of the tryptophan aminotransferase (MoTam1) and the indole-3-pyruvate decarboxylase (MoIpd1). In comparison to the wild type, IAA production was significantly reduced in the <i>motam1</i>Δ mutant, and further reduced in the <i>moipd1</i>Δ mutant. Correspondingly, mycelial growth, conidiation, and pathogenicity were defective in the <i>motam1</i>Δ and the <i>moipd1</i>Δ mutants to various degrees. Targeted metabolomics analysis further confirmed the presence of a functional IPA pathway, catalyzed by MoIpd1, which contributes to IAA/auxin production in <i>M. oryzae</i>. Furthermore, the well-established IAA biosynthesis inhibitor, yucasin, suppressed mycelial growth, conidiation, and pathogenicity in <i>M. oryzae</i>. Overall, this study identified an IPA-dependent IAA synthesis pathway crucial for <i>M. oryzae</i> mycelial growth and pathogenic development.