The association of binucleate Rhizoctonia (BNR) AG-K with soybean and the interaction of BNR, R. solani AG-4, and soybean seedlings were investigated to elucidate the mechanism of biocontrol of R. solani by BNR. Sixty-hour-old seedlings were inoculated and incubated in a growth chamber at 24°C; plants were examined with light microscopy and with scanning and transmission electron microscopy at various times following inoculation. BNR grew over hypocotyls, roots, and root hairs, but only colonized epidermal cells. Hyphae of BNR appeared to attach to the epidermis and, 5.5 h following inoculation, began penetrating cells by means of penetration pegs without forming distinct appressoria or infection cushions. There was evidence of cuticle degradation at the point of penetration. Infection hyphae moved to adjacent epidermal cells by direct penetration of epidermal radial walls. There were epidermal and cortical cell necrosis, beginning with the fragmentation of the tonoplast and followed by the disintegration of cytoplasm, organelles, and plasma membranes. Cell necrosis was also observed in adjacent cells where there was no evidence of BNR hyphae. Cell walls were not destroyed. After 144 h, there was noevidence of BNR hyphae in cortical cells. Attempted penetrations were observed, but papillae formed on the inside of cortical cell walls. Pre-inoculation of soybean seedlings with BNR 24 or 48 h before inoculation with R. solani (1 cm between inocula) affected the growth of R. solani on soybean tissue. There were fewer hyphae of R. solani, the hyphae branched sparingly, and infection cushions were rare when compared with hyphal growth on soybean inoculated only with R. solani. These effects were observed before the BNR hyphae began to intermingle with the hyphae of R. solani on the surface of the inoculated host. Preinoculation of soybean seedlings 24 h before inoculation with R. solani significantly (P = 0.05) reduced disease incidence and severity caused by R. solani AG-4. The lesions caused by R. solani always appeared distally, not proximally, to the BNR inoculum. The interactions of intermingling hyphae of BNR and R. solani were examined in vitro and on the surface of the host. There was no evidence of lysis, mycoparasitism, inhibition of growth, or any other form of antagonism between hyphae. The results of these studies strongly suggest that induced resistance is the mechanism of biocontrol of R. solani on soybean by BNR. The inhibition of hyphal growth of R. solani on the surface of soybean tissue preinoculated with BNR appears to be a novel characteristic of induced resistance.