BACKGROUND: Ustilago maydis is the basidiomycete fungus responsible for common smut of corn and is a model organism for the study of fungal phytopathogenesis. To aid in the annotation of the genome sequence of this organism, several expressed sequence tag (EST) libraries were generated from a variety of U. maydis cell types. In addition to utility in the context of gene identification and structure annotation, the ESTs were analyzed to identify differentially abundant transcripts and to detect evidence of alternative splicing and anti-sense transcription. RESULTS: Four cDNA libraries were constructed using RNA isolated from U. maydis diploid teliospores (U. maydis strains 518 x 521) and haploid cells of strain 521 grown under nutrient rich, carbon starved, and nitrogen starved conditions. Using the genome sequence as a scaffold, the 15,901 ESTs were assembled into 6,101 contiguous expressed sequences (contigs); among these, 5,482 corresponded to predicted genes in the MUMDB (MIPS Ustilago maydis database), while 619 aligned to regions of the genome not yet designated as genes in MUMDB. A comparison of EST abundance identified numerous genes that may be regulated in a cell type or starvation-specific manner. The transcriptional response to nitrogen starvation was assessed using RT-qPCR. The results of this suggest that there may be cross-talk between the nitrogen and carbon signalling pathways in U. maydis. Bioinformatic analysis identified numerous examples of alternative splicing and anti-sense transcription. While intron retention was the predominant form of alternative splicing in U. maydis, other varieties were also evident (e.g. exon skipping). Selected instances of both alternative splicing and anti-sense transcription were independently confirmed using RT-PCR. CONCLUSION: Through this work: 1) substantial sequence information has been provided for U. maydis genome annotation; 2) new genes were identified through the discovery of 619 contigs that had previously escaped annotation; 3) evidence is provided that suggests the regulation of nitrogen metabolism in U. maydis differs from that of other model fungi, and 4) Alternative splicing and anti-sense transcription were identified in U. maydis and, amid similar observations in other basidiomycetes, this suggests these phenomena may be widespread in this group of fungi. These advances emphasize the importance of EST analysis in genome annotation.