Sclerotinia sclerotiorum is a devastating soilborne fungal pathogen that causes Sclerotinia stem rot in many economically important crops. It forms sclerotia, resilient dormant structures that can persist in soil for years. Understanding the molecular mechanism of sclerotia formation is crucial for developing effective control strategies, but only a limited number of signaling components have been uncovered in this process. Through independent forward genetic screens, we identified SsLae1 and SsVel1, two core components of the conserved fungal velvet complex, as essential regulators of sclerotia formation and virulence in S. sclerotiorum. Disruption of either gene abolished sclerotia formation, impaired compound appressorium development, and significantly reduced virulence. Further RNA-seq analysis using the Ssvel1 mutant revealed widespread downregulation of known developmental and virulence regulators. Collectively, these findings establish the velvet complex as a master regulator for both sclerotia development and virulence in S. sclerotiorum.