Growth of the biocontrol fungus Epicoccum nigrum was more sensitive to ionic solute water stress (NaCl) than non-ionic (glycerol) on potato dextrose-based media at -0.5, -3.0 and -5.5 MPa water potentials. Subsequent physiological manipulation of growth of E. nigrum in glycerol-modified media to -3.0 MPa water potential resulted in a significant increase in the accumulation of compatible solutes in both mycelial liquid cultures and spores, but no enhanced accumulation of the desiccation protectant trehalose, when compared to unmodified media (-0.5 MPa). The main solute accumulated was glycerol, followed by arabitol. In temporal studies over 20 days maximum accumulation of glycerol occurred in 5-d old cultures with water stressed cultures having 250x greater amounts than those from unmodified medium. The arabitol content was also higher in mycelium and spores produced under water stress. The difference was maximum after 15 days growth. Glucose content decreased over time in mycelial colonies but increased in spores. The germination of conidia from the two treatments was similar, regardless of compatible solute content, even at -9.25 MPa water potential stress. However, germ tube extension was significantly increased at this water potential level. The production of E. nigrum spores at -3.0 MPa water potential resulted in improved survival when stored fresh at 4 and 25 degrees C. However, freeze-drying severely affected the viability of spores produced on both media (-0.5 or 3.0 MPa). Accumulation of compatible solutes may assist the fungus in better ecological competence and establishment in the phyllosphere, where water availability is often limited.