The ability of selected fungi to degrade the soil insecticide Dyfonate (O-ethyl S-phenyl ethylphosphonodithioate) into water-soluble, noninsecticidal metabolites was found to be dependent on the supply of nutrients, incubation time, temperature, pH, as well as other factors. With yeast extract as the carbon source (5 g/liter) and ammonium nitrate (1 g/liter) as the nitrogen source, both Rhizopus arrhizus and Penicillium notatum degraded the insecticide to a larger extent than with any other combination of nutrients used. With glucose as the carbon source, concentrations of ammonium nitrate above 5 g/liter inhibited the degradation of Dyfonate by R. arrhizus. Time-course studies on the metabolism of the insecticide indicated that Dyfonate was first absorbed by the fungal mycelium, where it was metabolized followed by the release of water-soluble, noninsecticidal, breakdown products into the culture media. The degradation appeared to involve the breakdown of Dyfonate into ethyl acetate soluble metabolites, such as ethylethoxyphosphonothioic acid, ethylethoxyphosphonic acid, methyl phenyl sulfoxide, and methyl phenyl sulfone. These compounds were then further degraded into water-soluble products. The optimum conditions for the degradation of the insecticide by R. arrhizus were observed at pH 6.0 to 7.0 and at 15–25 °C. Aged fungal mycelia were as active as mycelia in the logarithmic growth phase.