Agaricus bisporus and other fungi (Basidiomycetes, Ascomycetes, Fungi Imperfecti and Phycomycetes) grew and produced transparent zones in opaque media containing killed Bacillus subtilis as sole carbon and nitrogen source. Other Gram-positive and Gram-negative bacteria were also degraded by A . bisporus. Degradation of B. subtilis by A . bisporus was examined by light and electron microscopy. Liquid cultures were assayed for extracellular fungal enzymes which included EN-acetylglucosaminidase, lipase, nucleases and acid, neutral and alkaline proteases.Microbial biomass in compost may serve as a source of nitrogen, carbon and minerals, and as a water reserve for the growth of A. bisporus.