Verticillium dahliae Kleb. is a phytopathogenic fungus that causes wilt disease in a wide range of crops, including cotton. The life cycle of V. dahliae includes three vegetative phases: parasitic, saprophytic and dormant. The dormant microsclerotia are the primary infectious propagules, which germinate when they are stimulated by root exudates. In this study, we report the first application of Agrobacterium tumefaciens-mediated transformation (ATMT) for construction of insertional mutants from a virulent defoliating isolate of V. dahliae (V592). Changes in morphology, especially a lack of melanized microsclerotia or pigmentation traits, were observed in mutants. Together with the established laboratory unimpaired root dip-inoculation approach, we found insertional mutants to be affected in their pathogenicities in cotton. One of the genes tagged in a pathogenicity mutant encoded a glutamic acid-rich protein (VdGARP1), which shared no significant similarity to any known annotated gene. The vdgarp1 mutant showed vigorous mycelium growth with a significant delay in melanized microsclerotial formation. The expression of VdGARP1 in the wild type V529 was organ-specific and differentially regulated by different stress agencies and conditions, in addition to being stimulated by cotton root extract in liquid culture medium. Under extreme infertile nutrient conditions, VdGARP1 was not necessary for melanized microsclerotial formation. Taken together, our data suggest that VdGARP1 plays an important role in sensing infertile nutrient conditions in infected cells to promote a transfer from saprophytic to dormant microsclerotia for long-term survival. Overall, our findings indicate that insertional mutagenesis by ATMT is a valuable tool for the genome-wide analysis of gene function and identification of pathogenicity genes in this important cotton pathogen.