The diversity of wood-inhabiting fungi was investigated by submerging woody baits at upstream and downstream sites of the Lam Tsuen and Tai Po Rivers in Hong Kong. The diversity of fungi in the Lam Tsuen River was also compared with that on natural woody substrates found in a previous study. There were differences in the species composition between the upstream and downstream sites, possibly reflecting natural variations along the river. The Tai Po River downstream was organically polluted, which appeared to have little effect on species diversity since more species were recorded. Organic pollution may, however, cause a shift in species composition. The fungal communities on baits and natural substrates in the Lam Tsuen River were similar, although a lower diversity was observed on baits. This may be related to the period of submergence and the fact that a single wood type was used. Cercophora spp. occurred frequently downstream in the Tai Po River, while the common species in the Lam Tsuen River were Aquaticola rhomboidea and Pseudoproboscispora aquatica. Further interpretation on the effects of organic pollution was limited because of single collection data but appropriate experimental designs--putting baits in unimpacted sites for assessing human impacts in streams--are suggested.