A fungus known as Cytosphaera mangiferae Died. was isolated for the first time from the diseased tissues of standing trees of Aquilaria agallocha Roxb. Irregular patches of diseased wood, a result of natural infection, are found in the trunks of standing A. agallocha trees, which are of great economic importance. A fragrant perfume locally known as attar is obtained from the diseased wood by steam distillation. Incomplete or partially diseased wood is employed in the preparation of a joss-stick locally known as agarbatee, which gives out fragrant fumes on burning. The fungus colonized wood blocks of A. agallocha when these were inoculated artificially. There is a possibility of commercial exploitation for the production of diseased wood by artificial infection.