During the past several years, California fruit and nut tree nurseries have lost hundreds of thousands of trees to a canker disease of unknown etiology. Typically, dormant 2 year old trees are lifted from the field, sorted and variously packaged into refrigerated warehouses to maintain dormancy until planting season in the spring. During storage, white, pink, and orange molds were observed sporulating on the bark of trees, often near the graft union. The inner bark, cambium, and sapwood beneath the sporulation become necrotic, which when severe can girdle the tree. Diseased dormant trees planted by growers collapse in the field. The same facultative fungi were isolated from both diseased and healthy trees. These fungi appear to reside endophytically in the inner bark and will only attack predisposed trees. Using segments of desiccation-stressed almond tree as host, Koch's postulates implicated Fusarium avenaceum and F. acuminatum as the primary causal agents. F. solani and an undescribed Cylindrocarpon sp. were also capable of causing a similar disease, but were less frequently encountered. Also, most isolates of F. avenaceum and F. acuminatum were ice nucleators, an ability, which though provocative in this environment, is of uncertain significance.