The brown rot fungus, Gloeophyllum trabeum(Pers.:Fr.) Murrill, has been shown to be attract, increase wood nutrition and generally benefit subterranean termites, including Coptotermes formosanus Shiraki. However, to date no research has been conducted to determine if the association is mutualistic. Our original objective was to determine if G. trabeum could be spread by C. formosanus. This would represent an obvious benefit to G. trabeum. Unexpectedly, we found that C. formosanus were suppressing G. trabeum. From these termites, green-spored fungi were isolated from the integument and gut and also from G. trabeum infected wood which was exposed to C. formosanus. We hypothesized that these fungi may have caused the observed G. trabeum suppression. Fungi were again isolated from the integument and the gut of laboratory maintained and fresh field collected colonies of C. formosanus and were identified. We found that Aspergillus flavus Link was associated with every laboratory maintained colony but with only one replication of a field collected colony. Dual culture tests showed that the fungi isolated from the integument were parasites and antagonists to G. trabeum. When tested against C. formosanus, A. flavus was found to be toxic whereas Trichoderma harzianum Rifai appeared to have a beneficial association with the termites. This study is the first to show that fungi present on C. formosanus control the growth of a competing cellulose consumer, G. trabeum.