Samples of wood discolored as a result of drill-bit wounds, the contiguous sapwood, and the bright-colored marginal tissue between them were taken from red maple (Acer rubrum) and hybrid poplar (Populus deltoides .times. P. trichocarpa) trees. The wounds (1.5 cm diameter .times. 5 cm deep) that initiated discoloration were 1-4 yr old in maple and 1 yr old in poplar. The concentration of soluble dry matter and phenols was greater in wood in the marginal zones of both species than in sapwood or discolored wood. Phenols in the marginal zones differed from those of sapwood and discolored wood by their solubility in organic solvents, UV spectra and chromatographic behavior. Soluble dry matter in the marginal zone, which was rich in phenols, inhibited the growth in vitro of 2 fungi that commonly decay living red maple trees. Zones of high phenolic content may limit the spread of microorganisms colonizing discolored wood and may account, in part, for compartmentalization of decay in trees.