In vitro production of cellulase and xylanase was common among diverse freshwater ascomycetes and their hyphomycetous anamorphs. Production of enzymes involved in lignin degradation was rare. Most isolates were capable of causing mass loss in angiosperm wood, although values were low, at approximately 10% during a 24-week period. A few isolates caused higher mass loss of up to 26.5%, and five of these were shown to solubilize significant amounts of lignin. This is the first report of lignin solubilization by freshwater fungi. Torula herbarum (hyphomycete) and Ophioceras dolichostomum (ascomycete) produced indices of lignin solubilization equivalent to those of terrestrial white-rot basidiomycetes. In all cases wood decay was 2.2- to 3-fold higher in exposed rather than submerged conditions.