Aspen (Populus tremuloides Michx.) and balsam poplar (Populus balsamifera L.) are major components of the forest resources in the prairie provinces and northeastern British Columbia. These two species are now recognized as commercially important. They are expected to play a central role in the forest industry in the prairie provinces during the 21st century.

Decay and stain caused by various fungi have been identified as the two most important factors limiting the utilization of aspen. More than 250 species of fungi are known to be associated with decay of North American aspen, and many other non-decay fungi have been isolated from decayed, stained and clear aspen wood. The most common and most important cause of aspen trunk rot in Alberta is Phellinus tremulae (Bondartsev) Bondartsev and Borisov.

Trees bearing a black gall are resistant to attack by P. tremulae. Therefore, this black gall has become the target of increased biological and chemical research during the last five years.

Isolation of fungi on the surface of black galls from aspen trunks collected in various areas of Alberta has resulted in the isolation of a new fungus, Phoma etheridgei sp.nov. Hutchison and Hiratsuka (Can. For. Serv.; North. For. Res. Cent., unpublished results) which shows antagonistic activity against P. tremulae. In this work, this activity was found to be due to metabolites of P. etheridgei isolated from liquid cultures. The metabolites produced by P. etheridgei were examined. Bioassay directed separation of the metabolites led to the isolation of phomalone, the compound responsible for the activity against P. tremulae. The isolation, structure determination, bioactivity, and biosynthesis of this new natural product are presented herein.