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Lineage-specific genes (LSGs) have long been postulated to play roles in the establishment of genetic barriers to intercrossing and speciation. In the genome ofNeurospora crassa, most of the 670NeurosporaLSGs that are aggregated adjacent to the telomeres are clustered with 61% of the HET-domain genes, some of which regulate self-recognition and define vegetative incompatibility groups. In contrast, the LSG-encoding proteins possess few to no domains that would help to identify potential functional roles. Possible functional roles of LSGs were further assessed by performing transcriptomic profiling in genetic mutants and in response to environmental alterations, as well as examining gene knockouts for phenotypes. Among the 342 LSGs that are dynamically expressed during both asexual and sexual phases, 64% were detectable on unusual carbon sources such as furfural, a wildfire-produced chemical that is a strong inducer of sexual development, and the structurally-related furan 5-hydroxymethyl furfural (HMF). Expression of a significant portion of the LSGs was sensitive to light and temperature, factors that also regulate the switch from asexual to sexual reproduction. Furthermore, expression of the LSGs was significantly affected in the knockouts ofadv-1andpp-1that regulate hyphal communication, and expression of more than one quarter of the LSGs was affected by perturbation of the mating locus. These observations encouraged further investigation of the roles of clustered lineage-specific and HET-domain genes in ecology and reproduction regulation inNeurospora, especially the regulation of the switch from the asexual growth to sexual reproduction, in response to dramatic environmental conditions changes.