Fungal bioremediation is a very attractive tool to cope with environmental pollution. We aimed to decipher the cadmium (Cd) response of Purpureocillium sp. CB1, isolated from polluted soil, at transcriptome level by RNA-sequencing (RNA-seq). We used 500 and 2500 mg/L of Cd 2+ concentrations at two time points (t 6;36 ). RNA-seq determined 620 genes that were co-expressed in all samples. The highest number of differentially expressed genes (DEGs) was obtained within the first six h of exposure to 2500 mg/L of Cd 2+ . Several genes encoding transcriptional regulators, transporters, heat shock proteins, and oxidative stress-related genes were differentially expressed under Cd 2+ stress. Remarkably, the genes that encode salicylate hydroxylase, which is involved in naphthalene biodegradation pathway, were significantly overexpressed. Utilization of diesel as the sole carbon source by CB1 even in the presence of Cd 2+ supported concomitant upregulation of hydrocarbon degradation pathway genes. Furthermore, leucinostatin-related gene expression levels increased under Cd 2+ stress. In addition, leucinostatin extracts from Cd 2+ -treated CB1 cultures showed higher antifungal activity than the control. Notably, Cd 2+ in CB1 was mainly found as bound to the cell wall, thus confirming its adsorption potential. Cd 2+ stress slightly reduced growth and led to mycelial malformation due to Cd 2+ adsorption, especially at a concentration of 2500 mg/L at t 36 . A strong correlation was recorded between RNA-seq and reverse-transcriptase-quantitative polymerase chain reaction (RT-qPCR) data. In conclusion, the study represents the first transcriptome analysis of Purpureocillium sp. under Cd 2+ stress, providing insights into the primary targets for rational engineering to construct strains with remarkable bioremediation potency. Key points • Upregulation of genes encoding salicylate hydroxylases under Cd 2+ stress • Maximum Cd 2+ adsorption at 500 mg/L at t 36 as tightly bound to the cell wall • Concordant bioremediation potential of CB1 on Cd 2+ and diesel Graphical abstract