The tolerance of Paecilomyces variotii to borate used as a wood preservative was investigated. P, variotii was able to grow, in the presence of up to 8 g l(-1) borax in liquid malt extract cultures and on solid substrates such as malt-agar and borax-treated Scots pine, larch, and space sawdusts. The fungus excreted increased amounts of beta-D-1,4-glucosidase when grown on borax-treated sawdust, a mechanism whereby increased amounts of glucose could be obtained for growth. Boron and glucose in the medium form a complex between the hydroxyl groups of glucose and boron, and supplying increased amounts of glucose in liquid culture enabled the fungus to grow in increasing concentrations of borax. A stable white mutant was selected from growth in high borate concentrations with similar characteristics to the parent with respect to beta-D-1,4-glucosidase secretion, but with a changed morphology in that it did not release aerial spores. The mutant has potential uses in integrated-control treatments as wood protectants.