Sixty-four wild heterokaryotic isolates of Phlebiopsis gigantea were analysed for asexual spore production, growth rate and competitive ability against Heterobasidion in vitro, as well as growth rate in Norway spruce wood. These P. gigantea traits were considered important for controlling infection of Norway spruce stumps by spores of Heterobasidion spp. Ten most promising P. gigantea isolates were crossed with each other and 172 F(1) progeny heterokaryons were analysed for the above-mentioned traits. Thirteen most promising progeny heterokaryons were selected and their biocontrol ability against infection by Heterobasidion was compared with the parental isolates in stem pieces of Norway spruce. The results indicated that the progeny strains had generally better traits and control efficacy than the parental strains. The genetic effects accounted for a part of the variations between progeny and parental strains. This further suggests that there is a potential to improve the biocontrol properties of P. gigantea through breeding.