The role of autophagy in necrotrophic fungal physiology and infection biology is poorly understood. We have studied autophagy in the necrotrophic plant pathogen Fusarium graminearum in relation to development of nonassimilating structures and infection. We identified an ATG8 homolog F. graminearum ATG8 whose first 116 amino acids before the predicted ATG4 cleavage site are 100% identical to Podospora anserina ATG8. We generated a ΔFgatg8 mutant by gene replacement and showed that this cannot form autophagic compartments. The strain forms no perithecia, has reduced conidia production and the aerial mycelium collapses after a few days in culture. The collapsing aerial mycelium contains lipid droplets indicative of nitrogen starvation and/or an inability to use storage lipids. The capacity to use carbon/energy stored in lipid droplets after a shift from carbon rich conditions to carbon starvation is severely inhibited in the ΔFgatg8 strain demonstrating autophagy-dependent lipid utilization, lipophagy, in fungi. Radial growth rate of the ΔFgatg8 strain is reduced compared with the wild type and the mutant does not grow over inert plastic surfaces in contrast to the wild type. The ability to infect barley and wheat is normal but the mutant is unable to spread from spikelet to spikelet in wheat. Complementation by inserting the F. graminearum atg8 gene into a region adjacent to the actin gene in ΔFgatg8 fully restores the WT phenotype. The results showed that autophagy plays a pivotal role for supplying nutrients to nonassimilating structures necessary for growth and is important for plant colonization. This also indicates that autophagy is a central mechanism for fungal adaptation to nonoptimal C/N ratios.