Accumulation and transformation of tellurite (TeO32−) by a species of Fusarium and Penicillium citrinum was examined using both solid and liquid Czapek Dox medium. In liquid medium, tellurite partitioned into soluble and insoluble species, and in tellurite-containing (1 mM) liquid medium at pH 6, approx. 60% of added tellurite precipitated after 48 h. Experiments showed that in liquid medium containing 1 mM sodium tellurite, the Fusarium sp. accumulated a maximum of ∼0·6 μmol Te (mg D.W.)−1 after 48 h. P. citrinum accumulated a much lower amount of tellurium, ∼0·07 μmol (mg D.W.)−1 falling to <0·02 μmol (mg D.W.)−1 after 48 h. Both organisms showed marked differences in the pattern of pH change of the medium, with the pH increasing during growth of the Fusarium sp. in 1 mM tellurite to ∼pH 6·7 after 2 wk. In contrast, the pH decreased during growth of P. citrinum in 1 mM tellurite, to a level of ∼pH 2·7 after 2 wk. On agar medium, test fungi exhibited tolerance to high levels of tellurite (up to 100 mM Na2TeO3) and this was associated with blackening of the growing colonies as well as the surrounding agar. TEM revealed the deposition of large black granules, apparently in vacuoles, which corresponded with the reduction of tellurite to amorphous elemental tellurium. Precipitation of amorphous tellurium on and around the biomass was also observed and confirmed by energy-dispersive X-ray microprobe analysis. In addition to the reductive transformation of tellurite, Fusarium sp. also displayed transformation of tellurite into a volatile form. The production of volatile tellurium by Fusarium sp. occurred over the whole growth period and amounted to an average value of 7·8 μmol Te (∼0·16%) from 51 growth medium with an initial concentration of 1 mM Na2TeO3. Although P. citrinum also transformed tellurite to elemental tellurium, volatilization of tellurium was not detected. It is concluded that different mechanisms of tellurium transformation are species-dependent and can be influenced by physico-chemical changes in the medium, e.g. pH, which can affect tellurium speciation into soluble and insoluble forms and bioaccumulation. In view of the extremely small amounts of Te volatilized by the Fusarium sp., this process cannot be considered to be an important detoxification mechanism.