Colonization of Pine Christmas trees by Verticicladiella procera Kendr. causes Procera root disease. Little is presently known regarding the pattern and effects of fungal development within colonized trees. The present studies were undertaken to elucidate the developmental pattern of the fungus in colonized trees, to gather information on possible mechanisms and physiological effects of disease development, and to explore the relationship between V. procera and other, well documented bluestain fungi. The presence of cellulose was demonstrated in the cell walls of X. procera, indicating the probable genetic relatedness of this fungus with Ophiostoma (Ceratocystis) bluestain fungi. Inoculation studies revealed that the fungus could penetrate wounded sapwood, and that colonized seedlings had lower water potentials than uncolonized seedlings. In addition, it was found that the fungus could persist in resinous stem lesions for 22 months without foliar symptoms, and resinous stem lesions with the fungus were significantly longer and deeper than wound lesions. An intensive isolation study revealed that the initial point of colonization in a tree is apparently at the root collar, progressing acropetally in both directions. Analysis of radial growth from increment cores showed that colonized trees had grown more slowly for the preceding three years than uncolonized trees. The sapwood moisture content of these cores was also significantly reduced in the colonized trees, indicating that the stem was drying out as symptoms developed. Histological examination of colonized sapwood showed that U fungal colonization of tissues progressed along rays and resin ducts, in a fashion similar to that of bluestain fungi. Permeability measurements demonstrated that symptomatic sapwood, either resin-soaked or black-stained, had significantly reduced water movement relative to asymptomatic sapwood.