Abstract Background Colletotrichum graminicola is a hemibiotrophic fungal pathogen that causes maize anthracnose disease. It progresses through three recognizable phases of pathogenic development in planta: melanized appressoria on the host surface prior to penetration; biotrophy, characterized by intracellular colonization of living host cells; and necrotrophy, characterized by host cell death and symptom development. A “Mixed Effects” Generalized Linear Model (GLM) was developed and applied to an existing Illumina transcriptome dataset, substantially increasing the statistical power of the analysis of C. graminicola gene expression during infection and colonization. Additionally, the in planta transcriptome of the wild-type was compared with that of a mutant strain impaired in the establishment of biotrophy, allowing detailed dissection of events occurring specifically during penetration, and during early versus late biotrophy. Results More than 2000 fungal genes were differentially transcribed during appressorial maturation, penetration, and colonization. Secreted proteins, secondary metabolism genes, and membrane receptors were over-represented among the differentially expressed genes, suggesting that the fungus engages in an intimate and dynamic conversation with the host, beginning prior to penetration. This communication process probably involves reception of plant signals triggering subsequent developmental progress in the fungus, as well as production of signals that induce responses in the host. Later phases of biotrophy were more similar to necrotrophy, with increased production of secreted proteases, inducers of plant cell death, hydrolases, and membrane bound transporters for the uptake and egress of potential toxins, signals, and nutrients. Conclusions This approach revealed, in unprecedented detail, fungal genes specifically expressed during critical phases of host penetration and biotrophic establishment. Many encoded secreted proteins, secondary metabolism enzymes, and receptors that may play roles in host-pathogen communication necessary to promote susceptibility, and thus may provide targets for chemical or biological controls to manage this important disease. The differentially expressed genes could be used as ‘landmarks’ to more accurately identify developmental progress in compatible versus incompatible interactions involving genetic variants of both host and pathogen.