Sexual reproduction is a fundamental developmental process that allows for genetic diversity through the control of zygote formation, recombination, and gametogenesis. The correct regulation of these events is paramount. Sexual reproduction in filamentous fungi, including mating strategy (self-fertilization/homothallism or outcrossing/heterothallism), is determined by the expression of mating type genes at mat loci. Aspergillus nidulans matA encodes a critical regulator that is a fungal ortholog of the hSRY/SOX9 HMG box proteins. In contrast to well-studied outcrossing systems, the molecular basis of homothallism and role of mating type genes during a self-fertile sexual cycle remain largely unknown. In this study the genetic model organism, A. nidulans, has been used to investigate the regulation and molecular functions of the matA mating type gene in a homothallic system. Our data demonstrate that complex regulatory mechanisms underlie functional matA expression during self-fertilization and sexual reproduction in A. nidulans. matA expression is suppressed in vegetative hyphae and is progressively derepressed during the sexual cycle. Elevated levels of matA transcript are required for differentiation of fruiting bodies, karyogamy, meiosis, and efficient formation of meiotic progeny. matA expression is driven from both initiator (Inr) and novel promoter elements that are tightly developmentally regulated by position-dependent and position-independent mechanisms. Deletion of an upstream silencing element, matA SE, results in derepressed expression from wildtype (wt) promoter elements and activation of an additional promoter. These studies provide novel insights into the molecular basis of homothallism in fungi and genetic regulation of sexual reproduction in eukaryotes.