Studies on the occurrence of aquatic hyphomycetes were carried out in Panekal sulfur spring in the Western Ghats, India by incubation of leaf litter and analysis of natural foam and of induced foam. Sampling was done once every three months over a period of two years from September 1989 to June 1991. The temperature, pH, dissolved oxygen, and sulfide content of water were also measured. No fungi were observed within the spring, whereas 16 species belonging to 13 genera were isolated from two outflow sites of the stream. The percent frequency of Triscelophorus monosporus was high (24.0%). The temperature of water in the spring ranged between 30.0 and 38.5°C and the sulfide content between 3.2 and 4.3 mg 1-1. Studies showed that sulfide water (4.0 mg 1-1) from the spring inhibited the growth of the colonies of Dactylella aquatica, Phalangispora constricta, Tetracladium setigerum, Vermispora cauveriana, and Wiesneriomyces laurinus. When the leaves colonized by aquatic hyphomycetes were incubated at different temperatures in sulfur-spring water and stream water separately, sporulation was not observed in any of the fungi at and above 35°C except Phalangispora constricta, which could sporulate at 35°C. At lower temperatures (15-30°C) relatively fewer species were found to sporulate in sulfur-spring water than in stream water.