The effect of water potential and temperature on growth and cellulolysis of 10 soil fungi which colonize cereal crop residues was determined . On 2% (w/v) milled straw agar all species grew in the range -0·7 to -7·0 MPa at both 10 and 20 ·C. Growth rates differed depending on the solute type used to control water potential. In general, but with the exception of the spp., growth decreased with decreasing water potential. Hyphal growth on sterile straw internode segments was much less than that on 2% straw agar. and colonized straw pieces best at high potential (-0·7 MPa) while only and the spp. grew at low potential (-7·0 MPa). spp., spp. and cleared cellulose agar most rapidly, depth of clearing decreasing with water potential in the range -0·7 to -2·8 MPa at 20 ·C. The relationship between dry weight loss of inoculated cellulose filter paper and water potential was more variable.