Fusarium graminearum is the causal agent of the Fusarium head blight (FHB) and a destructive pathogen of cereals accounting for high grain yield losses especially on wheat and maize. Like other fungal pathogens, F. graminearum secretes various extracellular enzymes, which are hypothesized to be involved in host infection. Extracellular lipolytic activity of F. graminearum was strongly induced in culture by wheat germ oil; this allowed us to isolate, clone, and characterize a gene (FGL1) encoding a secreted lipase. Expression analysis indicated that FGL1 is induced by lipid‐containing substrates and repressed by glucose. In planta, FGL1 transcription was detected 1 day post‐infection of wheat spikes. The function of the FGL1 gene product was verified by specifically demonstrating lipase activity after expression in a heterologous host. Ebelactone B, a known lipase inhibitor, repressed the lipolytic activity of the enzyme. Disease severity was strongly reduced when wild‐type conidia were supplemented with ebelactone B. Transformation‐mediated disruption of FGL1 led to reduced extracellular lipolytic activity in culture and to reduced virulence to both wheat and maize.