Fifty-four strains of the entomopathogenic fungusPaecilomyces farinosus, half of which had been isolated from balsam fir litter and half of which had been isolated from naturally infected spruce budworm larvae, were evaluated for their use of a number of complex carbohydrates and other carbon sources, to determine their potential saprophytic ability. The fungi were also tested for (i) their ability to grow on and to decompose balsam fir litter, and (ii) their ability to survive desiccation, which is likely to occur in the tree canopy. The fungi produced a wide range of enzymes, including cellulases, chitinases, and proteases. They also grew on and decomposed balsam fir litter. A discriminant analysis showed a tendency for the strains isolated from spruce budworm to grow better on gelatin, whereas those from the litter grew better on cellulose. We conclude thatP.farinosusis a versatile saprophyte, capable of opportunistically parasitizing spruce budworm larvae. These characteristics could be important when consideringP.farinosusas a possible agent of biological control.Key words:Paecilomyces farinosus, entomopathogen, spruce budworm, saprophytic ability, hydrolases.