Fungi are found in diverse ecological niches as primary decomposers, mutualists, or parasites of plants and animals. Although animals and fungi share a common ancestor, fungi dramatically diversified their life cycle, cell biology, and metabolism as they evolved and colonized new niches. This review focuses on a family of fungal transcription factors (Swi4/Mbp1, APSES, Xbp1, Bqt4) derived from the lateral gene transfer of a KilA-N domain commonly found in prokaryotic and eukaryotic DNA viruses. These virus-derived fungal regulators play central roles in cell cycle, morphogenesis, sexual differentiation, and quiescence. We consider the possible origins of KilA-N and how this viral DNA binding domain came to be intimately associated with fungal processes.