SUMMARYWhen fresh sugar‐cane bagasse containing about 50% water and 3% sugar was baled and stacked, it quickly heated to over 50°C and remained hotter than 40°C for 50 days. The residual sucrose was utilized by microbial growth and the content of fungal, bacterial and actinomycete spores increased to more than 108/g dry wt. The spores in heated bagasse were mostly of thermophilic actinomycetes and fungi, and included two actinomycetes implicated in bagassosis.Thermoactinomycetes saccharioccurred in 40% of samples examined, some of which yielded up to 5 × 106colonies/g, whileT. vulgarisoccurred in 80% of samples, but these rarely yielded more than 105colonies/g. Other organisms were cellulolytic and caused fibre deterioration. Heating and moulding could be much decreased either by drying to about 25% water content, which halved the spore content after storage, mostly at the expense of the actinomycetes, or by adding 2% by weight of propionic acid, which decreased the spore content to 4 × 106spores/g or less even after 18 months' storage. Sometimes adding only 0·6% of propionic acid or 2% of propionic acid applied as a 50% aqueous solution had a similar effect. Treatment with propionic acid thus decreased the deterioration of bagasse, permitted its storage between harvests and prevented the hazard of bagassosis to w