Sclerotium formation in Sclerotium rolfsii was completely inhibited by 2-mercaptoethanol at a concentration of 2–4 mM without any adverse effect on mycelial growth. Concentrations lower than 2 mM had no effect on mycelial growth and sclerotium formation, whereas both were inhibited at concentrations higher than 4 mM. Complete inhibition of sclerotium formation with no effect on mycelial growth was also obtained by propyl mercaptan, 1-butyl mercaptan and 2-butyl mercaptan at a concentration of 0.10 mM. Sclerotium formation was also inhibited by benzyl mercaptan and thioglycolic acid at 0.15 mM and 2–4 mM concentration respectively, whereas it was only partially inhibited by L-cysteine and glutathione at 20 mM. Mycelium grown for 21 days in nutrient medium supplemented with mercaptoethanol at a concentration of 3 mM, when transferred into fresh medium without the chemical, grew normally and produced abundant mature sclerotia. Mercaptoethanol inhibited the initiation as well as the further development of young, unpigmented sclerotia. The mechanism of sclerotium formation was arrested completely when mercaptoethanol was added to the growth medium at any time between inoculation and the appearance of sclerotia of the "development" stage. It is suggested that the specific inhibitory action of mercaptoethanol could be used to study the mechanism of sclerotium formation.