Cryptococcus neoformans, the causative agent of cryptococcosis and a representative of the Basidiomycota phylum of Fungi, is a valuable model for our understanding of eukaryotic/fungal biology. Negative feedback is a well-documented mechanism across Eukarya to regulate developmental transitions. Here, we describe a repressor of the yeast-to-hypha transition, Ref1, which completes a negative feedback loop driven by the master regulator of hyphal morphogenesis, Znf2, during sexual development. Alternative transcription of Ref1, driven by Znf2, produces a functionally distinct Ref1 isoform. Isoform-specific capacity for phase separation imparts this functional distinction, making Ref1 a stronger repressor and more vulnerable to proteolytic degradation. The multimodal nature of Ref1 provides versatility that allows cells to fine-tune Ref1 activity to suit developmental context. This work reveals a mechanism by which phase separation allows a transcriptional program to tailor its own repression to guide an organism through morphological transition.