Fungal communities on decaying culms of a bamboo host (Phyllostachys bambusoides) from freshwater and adjacent terrestrial habitats were identified. Collections were made at Xiao Bai Long Mountain, Yiliang, Yunnan, China in the winter and summer. In each collection, 100 similar-sized bamboo culms were collected, comprising 50 submerged samples from a stream and 50 terrestrial samples from adjacent riparian vegetation. A total of 82 fungal taxa were recorded from the samples, including 30 ascomycetes and 52 anamorphic fungi. The frequency of occurrence of these fungi were recorded and the Shannon-Weiner indices (H') were applied to evaluate fungal diversity. The results showed that variation of the fungal diversity between the summer and winter collections was insignificant (0.2 < p < 0.5). Fungal diversity on submerged bamboo however, was significantly higher than that on terrestrial bamboo (p < 0.001). Further findings were that: (1) some commonly recorded freshwater and terrestrial taxa were found in both habitats, but overall there were only 15 overlapping species between the two habitats; (2) the dominant species in each habitat were considerably different, and (3) only a few fungi were dominant, while most species were rare, being recorded only once or twice. Factors responsible for the distribution patterns and variations in composition of the fungal communities are discussed.