Xylanase activity was detected among 34 of 77 fungal isolates derived from decaying wood, debris and soil samples collected in coastal mangrove environment of Hong Kong. Of those, three isolates CY2809 (Staganospora sp.), CY4786 and CY5040 were chosen for comparison of xylanase production in parallel to HU5048 (Aspergillus awamori), a terrestrial, highly productive isolate. Based on the assessment of mycelial biomass, xylanase activity and content of xylose-equivalent reducing sugars in their liquid cultures, the isolate CY4786 was best for xylanase production in a basal medium containing birchwood xylan (10.0 g/L) as a sole carbon source, yeast extract (2.5 g/L) and sea salts (15.0 g/L) with initial pH 7.8. When assayed at the optimized regime of 50 degrees C and pH 4.6, the activity of xylanase produced by CY4786 in 7d liquid culture at 25 degrees C reached 1.07 x 10(4) unit/mL. The results indicate that the mangrove fungi act as hemicellulose decomposers in the mangrove environment where highly xylanase-productive isolates can be searched for exploitation. A discussion is given on the possible use of the content of xylose-equivalent reducing sugars as an index to simplify conventional xylanase activity assay method for fungal isolate survey.