The influence of oil application to soil showed an increase in numbers of colony forming units (CFU) as well as in length of mycelium of soil fungi. Further the treatment favoured the growth of Graphium and Paecilomyces. These genera were almost absent in the control area, which obviously had a much richer and more evenly distributed fungal flora. Utilization of crude oil and pure hydrocarbons by the dominating fungi was demonstrated in culture.