In Kerala, small-scale wood-based industries, such as packing case, plywood and match manufacture units, utilize a large quantity of wood from trees with soft wood. A preliminary survey of such industries in Trichur district showed that nearly all the species utilized (Hevea brasiliensis, Ailanthus triphysa, Bombax ceiba [B. malabaricum], Alstonia scholaris, Mangifera indica, Anacardium occidentale, Macaranga peltata and Erythrina stricta) were susceptible to sapstain fungi. Fungi such as Aspergillus, Penicillium, Trichoderma, Memnoniella, Mucor, Syncephalastrum and Absidia colonized the wood surface without penetrating deeply and imparted various colours to the surface. Species such as Botryodiplodia theobromae, Alternaria, Acremonium, Scytalidium, Fusarium and Ceratocystis stained both the surface and the deeper wood, with B. theobromae accounting for >50% of the sapstain observed. Preliminary work on biological control of sapstain fungi with a bacterium isolated from wood surface is mentioned.