The pathology and distribution of European beech trees bearing elongated bark lesions (strip-cankers) were investigated. Two types of canker were recognized: those on small trees (<40 cm diameter at breast height (dbh): 1·4 m above ground level) which bore fruit bodies of the xylariaceous ascomycete Biscogniauxia nummularia (Bull.) O. Kuntze, and those on larger specimens (>40 cm dbh) which were consistently associated with the diatrypaceous ascomycete Eutypa spinosa (Pers.) Tul. & C. Tul. All cankers were strictly annual, having formed during single growing seasons following periods of low water availability. The regional and local distribution of trees bearing lesions also appeared to be correlated with environmental conditions, being most severe where low rainfall or high temperatures had occurred. Population studies of the associated fungi, generally considered as saprotrophs, indicated the presence of unique genotypes within individual cankered trees and provided no evidence for the existence of pathotypes within either species. Within the decay columns which underlay canker surfaces, both B. nummularia and E. spinosa formed longitudinally extensive genets, implying non-mycelial spread in colonization. Suppression of both inter- and intraspecific incompatibility between fungi occurred in regions of canker decay columns with elevated water contents. The possible significance of coexistence between the ascomycetes B. nummularia and ‘Hypoxylon purpureum’ (sensu Sharland & Rayner, 1989b) and of the formation of heterokaryons by E. spinosa is discussed.