Sexual reproduction of heterothallic clavicipitaceous fungus Villosiclava virens (anamorph: Ustilaginoidea virens) generates ascospores, which is considered as primary infection source of rice false smut disease. However, little is known about the molecular underpinnings of sexual reproduction in V. virens. In this study, transcriptomes of V. virens in fruiting body (FB) and sporulating mycelia (SM) were compared using Illumina paired-end sequencing technology. A total of 33,384,588 and 23,765,275 clean reads of FB and SM transcriptome profiles could be used to map cDNA of V. virens, respectively. We evaluated the gene expression variations between FB and SM, a total of 488 genes therein were significantly higher expressed in FB than SM, and 342 genes were significantly higher expressed genes in SM than FB. These differentially expressed genes were annotated using Kyoto Encyclopedia of Genes and Genomes and Gene Ontology databases. Several genes were found to specifically function in sexual reproduction, involving in mating type, pheromone synthesis, signaling transduction, transcription factors, and meiosis; additionally, a few of genes were presumed to function in conidia sporulation and infection. Comparative transcriptome analysis of V. virens during FB and SM provided an overview of gene expression profiles at the transcriptional level and provided hints to better understand the molecular mechanisms of sexual development. Additionally, the data presented here also proved benefit for mining of essential genes contributing to sexual conidiation and infection.