Two types of genetic markers, vegetative compatibility and RAPD, were evaluated for their ability to assess genetic variation among 38 isolates of the entomopathogenic fungus, Paecilomyces fumosoroseus. Both markers revealed significant polymorphisms. Nitrate non-utilizing mutants were generated from chlorate-containing media and used as forcing markers to observe heterokaryon formation and determine vegetative compatibility. Nineteen separate vegetative compatibility groups (VCGs) were identified, only seven having at least two members and 12 represented by single isolates. No correlation was observed between VCG and either insect host or geographic origin. Nine RAPD primers produced 365 unique fragments and could distinguish three different phenetic groups. RAPD profiles conclusively showed that strains within some VCGs were genetically unrelated, indicating that these strains were not clonal in origin. The large number of VCGs suggests that formation of heterokaryons and possible genetic exchange are uncommon. DNA fingerprinting with RAPD-PCR provides high resolution of genotype distribution and could be useful in tracking the fate of biocontrol agents released into the environment.