The gelatinous layer (G-layer) of tension-wood fibres in reaction wood of beech showed alterations as a result of the physiological processes involved in the conversion of sapwood into false heartwood or reaction-zone tissue. Using transmitted-light, fluorescence and UV microscopy, polyphenolic compounds were found to infiltrate and encrust the cellulose microfibrils within the G-layer. Experiments with naturally infected and artificially inoculated wood showed that these processes affect the rate and mode of degradation by wood-decaying fungi. Thus, although the ascomycete Ustulina deusta was able to degrade the G-layer from within the lumina of tension-wood fibres in unaltered sapwood, it failed to do so for a prolonged period within false heartwood and reaction zones. In both situations, however, there was some degradation of the underlying secondary wall in the form of erosion troughs which can be attributed to soft rot ‘type II’, and internal cavity formation typical for ‘type I’ attack. The present study indicates that not only cell type, but also alterations in the cell wall structure, affect the activity and degradation mode of decay fungi in beech.