Pseudomonas cepacia, a common soil and rhizosphere inhabitant, showed strong antagonism against several fungal plant pathogens. In dual cultures it greatly restricted the growth and conidial formation in several of these fungi. Growth restriction was associated with the frequent induction of a variety of morphological abnormalities such as chlamydoconidium formation, hyphal swellings, vacuolation and granulation of the mycelial contents, as well as lysis of hyphae and conidia. The induction of these deleterious morphological changes in fungi and inhibition of conidial formation were also found with a crude preparation of an antifungal compound from P. cepacia. Mutants, defective in the production of this antifungal compound, failed to induce these morphological changes; this suggests that the antifungal compound is responsible for these abnormalities.