Dalbergia sissoo (shisham) seeds naturally infected with Curvularia lunata showed either black discoloration (1.25 to 8.75%) or appeared dull (0.50 to 10.0%). When they were incubated, they yielded pure growth of the pathogen. During location studies, cleared whole mount preparation and component plating revealed the presence of infection restricted to the seed coat and cotyledons of asymptomatic seeds. However, this pathogen penetrates the deeper tissue of symptomatic seeds to the embryonic axis. Due to heavy infection, the disintegration of cells results in the formation of lysogenic cavities. The fungus enters the seeds through the hilar region and epidermal cells of the seed coat to the aleurone layer and finally into the cotyledonary cells of the embryo. The pathogen is both externally and internally seed-borne. The internal inoculum affected seed germination, viability and caused high total (pre-and post-emergence) losses (15 to 80%). The pathogen was transmitted from seed to seedling causing heavy losses to the tree plantation.