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Dark pigmented fungi of the Gaeumannomyces-Phialophora complex were isolated from the roots of wheat grown in fields in eastern Washington State. These fungi were identified as Phialophora spp. on the basis of morphological and genetic characteristics. The isolates produced lobed hyphopodia on wheat coleoptiles, phialides, and hyaline phialospores. Sequence comparison of internal transcribed spacer regions indicated that the Phialophora isolates were clearly separated from other Gaeumannomyces spp. Primers AV1 and AV3 amplified 1.3-kb portions of an avenacinase-like gene in the Phialophora isolates. Phylogenetic trees of the avenacinase-like gene in the Phialophora spp. also clearly separated them from other Gaeumannomyces spp. The Phialophora isolates were moderately virulent on wheat and barley and produced confined black lesions on the roots of wild oat and two oat cultivars. Among isolates tested for their sensitivity to 2,4-diacetylphloroglucinol (2,4-DAPG), the 90% effective dose values were 11.9 to 48.2 microg ml(-1). A representative Phialophora isolate reduced the severity of take-all on wheat caused by two different isolates of Gaeumannomyces graminis var. tritici. To our knowledge, this study provides the first report of an avenacinase-like gene in Phialophora spp. and demonstrated that the fungus is significantly less sensitive to 2,4-DAPG than G. graminis var. tritici.