Paraphysoderma sedebokerense, a parasitic fungus in Blastocladiomycota, can infect the microalga Haematococcus pluvialis and cause culture crashes. The early development including encystment and cyst germination of P. sedebokerense on microalgal cell walls is vital to the parasitism process. To evaluate the potential role of nitrogen in the early development of P. sedebokerense, we analyzed colony formation of P. sedebokerense on agar plates containing inorganic nitrogen (i.e., nitrate), transcriptome of P. sedebokerense during encystment and penetration, amino acid utilization by P. sedebokerense and amino acid profile of microalgal cell walls. Results indicated that nitrate facilitated the dispersal of amoeboid swarmers from sporangia. Transcriptome analysis indicated that Gene Ontology (GO) terms related to nitrate assimilation and methionine biosynthesis were enriched in P. sedebokerense when it encysted and penetrated the microalgal cell walls. Furthermore, amoeboid swarmers can encyst and penetrate the extracellular glycoproteinaceous matrix of microalgal aplanospores. These results suggested that organic nitrogen was involved in the early development of P. sedebokerense on microalgal cell walls. In addition, most of the abundant amino acids from the algal host were the preferable ones for fungal growth (i.e., L-alanine, L-arginine, L-glutamic acid and glycine). However, P. sedebokerense cannot directly utilize methionine, and methionine or amino acid biosynthesis inhibitors (i.e., pyrimethanil and cyprodinil) completely abolished the parasitism process. These evidences revealed that methionine biosynthesis in the fungal pathogen was essential for the parasitism process, and methionine or amino acid biosynthesis inhibitors are effective for disease control.