Rhizoctonia solani AG1-IA is a soil-borne necrotrophic pathogen that causes devastating rice sheath blight disease in rice-growing regions worldwide. Sclerotia play an important role in the life cycle of R. solani AG1-IA. In this study, RNA sequencing was used to investigate the transcriptomic dynamics of sclerotial development (SD) of R. solani AG1-IA. Gene ontology and pathway enrichment analyses using the Kyoto Encyclopedia of Genes and Genomes (KEGG) were performed to investigate the functions and pathways of differentially expressed genes (DEGs). Six cDNA libraries were generated, and more than 300 million clean reads were obtained and assembled into 15,100 unigenes. In total, 12,575 differentially expressed genes were identified and 34.62% (4353) were significantly differentially expressed with a FDR ≤ 0.01 and |log 2 Ratio| ≥ 1, which were enriched into eight profiles using Short Time-series Expression Miner. Furthermore, KEGG and gene ontology analyses suggest the DEGs were significantly enriched in several biological processes and pathways, including binding and catalytic functions, biosynthesis of ribosomes, and other biological functions. Further annotation of the DEGs using the Clusters of Orthologous Groups (COG) database found most DEGs were involved in amino acid transport and metabolism, as well as energy production and conversion. Furthermore, DEGs relevant to SD of R. solani AG1-IA were involved in secondary metabolite biosynthesis, melanin biosynthesis, ubiquitin processes, autophagy, and reactive oxygen species metabolism. The gene expression profiles of 10 randomly selected DEGs were validated by quantitative real-time reverse transcription PCR and were consistent with the dynamics in transcript abundance identified by RNA sequencing. The data provide a high-resolution map of gene expression during SD, a key process contributing to the pathogenicity of this devastating pathogen. In addition, this study provides a useful resource for further studies on the genomics of R. solani AG1-IA and other Rhizoctonia species.