Cotton (Gossypium hirsutum) is the main agricultural export commodity from Tanzania. The most significant disease of the crop is fusarium wilt caused by Fusarium oxysporum f.sp. vasinfectum. Phytosanitary measures instituted at the cotton ginneries to prevent the distribution, for planting, of seed infected with the wilt fungus have become difficult to apply since economic liberalization and the entry of the private sector into cotton ginning and lint marketing. Surveys of cotton fields, ginneries and cotton buying posts were conducted in order to determine the factors affecting disease incidence and spread. In affected fields, disease incidence was generally less than 5%. Where it was greater than this, wilt symptoms were associated with root damage caused by the root-knot nematode (Meloidogyne incognita). At a number of ginneries, herdsmen were allowed to remove seed husks that accumulate at the ginneries as a byproduct of oil extraction. The husks are used as cattle feed and this was identified as a potential source of disease spread. At the buying posts visited, there was no system for separating cotton varieties or for identifying seed cotton purchased from villages infected with fusarium wilt. As a result, seed subsequently distributed for planting is likely to be a source of infection for the spread of this disease. The implications of economic liberalization in the cotton sector are discussed with respect to seed distribution and management of fusarium wilt.