The VosA-VelB heterocomplex governs expression of several genes associated with fungal development and secondary metabolism. In this study, we have investigated the functions of one of the VosA-VelB-activated developmental genes vadJ in development and production of the mycotoxin sterigmatocystin in the model fungus Aspergillus nidulans. The vadJ gene is predicted to encode a 957-amino acid length protein containing a highly conserved sensor histidine kinase domain. The deletion of vosA or velB resulted in decreased mRNA levels of vadJ throughout the life cycle, suggesting that VosA and VelB are necessary for proper expression of vadJ. Nullifying vadJ led to highly restricted colony growth, lowered formation of asexual spores, and about two-fold reduction in conidial viability. Conversely, the deletion of vadJ resulted in elevated production of sexual fruiting bodies and sterigmatocystin. These suggest that VadJ is necessary for proper coordination of asexual and sexual development, and sterigmatocystin production. In accordance with this idea, the deletion of vadJ led to elevated mRNA levels of the two key sexual developmental activators esdC and nsdD. In summary, the putative sensor histidine kinase VadJ represses sexual development and sterigmatocystin production, but activates asexual development in A. nidulans.