Pleurotus ostreatus, one of the most widely cultivated edible mushrooms, produces high numbers of spores causing severe respiratory health problems for people, clogging of filters and spoilage of produce. A non-sporulating commercial variety (SPOPPO) has been successfully introduced into the market in 2006. This variety was generated by introgression breeding of a natural mutation into a commercial variety. Our cytological studies revealed that meiosis in the natural and derived sporeless strains was blocked in metaphase I, apparently resulting in a loss of spore formation. The gene(s) underlying this phenotype were mapped to an 80 kb region strongly linked to sporelessness and identified by transformation of wild type genes of this region into a sporeless strain. Sporulation was restored by re-introduction of the DNA sequence encoding the P. ostreatus meiotic recombination gene MSH4 homolog (poMSH4). Subsequent molecular analysis showed that poMSH4 in the sporeless P. ostreatus was interrupted by a DNA fragment containing a region encoding a CxC5/CxC6 cysteine cluster associated with Copia-type retrotransposons. The block of meiosis in metaphase I by a poMSH4 null mutant suggests that this protein plays an essential role in both Class I and II crossovers in mushrooms, similar to animals (mice), but unlike in plants. MSH4 was previously shown to be a target for breeding of sporeless varieties in P. pulmonarius, and the null mutant of the MSH4 homolog of S. commune (scMSH4) confers an extremely low level of spore formation. We propose that MSH4 homologs are likely to be a breeding target for sporeless strains both within Pleurotus sp. and in other Agaricales.