Microfungi are an inconspicuous but important component of the biota o
f forest canopies. Within canopies, microfungi are found inhabiting li
ving and dead foliage, bark, and wood, and are also associated with ca
nopy epiphytes and arthropods. As epiphytes on foliage and twigs, micr
ofungi serve to concentrate dilute organic nutrients. Biomass and annu
al production by epiphytic microfungi can approach 500 kg/ha and may r
epresent a significant food resource For microarthropods. Saprotrophic
decomposers contribute to in situ decomposition of perched litter. Fu
ngal endophytes occupy healthy, asymptomatic foliage and stems. Some o
f these fungi also produce compounds antagonistic to insect herbivores
. Canopy microfungi may also provide a minor link between soil and aqu
atic food webs as early colonists of live foliage and twigs that compl
ete their sporulation cycles in soil or streams and as a portion of an
nual aboveground production that is assimiliated in soil as litterfall
. The varied components and functions of canopies with which microfung
i are associated suggest that biodiversity of the microfungal biota is
high and potentially a rich source of novel taxa.