Two fungi species were constantly isolated from the blue-stained wood of Benguet pine, namely: Ceratocystis ips Rumb. and Verticillum sp. The maximum rate of growth and stain development of both fungi on malt agar and wood was attained at 28 degree C. The moisture content of the wood did not significantly affect the growth and stain development of both fungi, except for C. ips through longitudinal direction of wood. In general, the increase in moisture resulted in slight growth and stain development. Statistically, the effect of blue stain on toughness of wood was not significant. However, there was an indication that toughness decreased as the time of incubation increased.