Examination by scanning electron microscopy and incubation on potato-dextrose agar medium showed that dry seeds ofRetama raetam were externally free of fungi. When planted in sandy loam soil, the seeds become colonized with eleven soil-borne fungal species. The fungi were isolated on cellulose agar, pectin agar and lignin agar media.Aspergillus flavus, A. niger, A. fumigatus, Penicillium capsolatum andFusarium oxysporum had broad occurrence and were recovered on all the three media. The production of hydrolytic enzymes by the isolated fungi depends on the substrate and species.Penicillium capsolatum, P. spinulosum andA. niger had wide enzymatic amplitude and they were able to produce cellulolytic, pectolytic and lignolytic activities on corresponding substrates as well as on seed-coat-containing media. The lignolytic activities of the isolated species exceptChaetomium bostrychodes andTrichoderma viride were enhanced by applying the seed-coat materials as C- source rather than lignin. SoakingR. raetam seeds in culture filtrates of most of the fungi grown on seed-coat-supplemented media induced a pronounced and distinct stimulating effect on seed germination. The most effective filtrates were those ofP. capsolatum, P. spinulosum andSporotrichum pulverulentum.