S. retiforme (B. and C.) Pat. is associated with A. Osborni New. and Ckll. The fungus insect relationship is perennial, depending only upon the life of the tree. The fungus furnishes a home and protection for the scale insects. The scale insects suck the juices of the host plant, grow, and finally reproduce their young in vast numbers. These young may pursue one of three courses: (1) they may settle down beneath the same fungus under which they were born and repeat the cycle; or (2) they may crawl out to other fungus-insect colonies; or (3) they may craAvl out and settle down on the clean bark. The latter insects are entirely responsible for the dissemination of the fungus. Certain young become infected soon after they are born. The manner of infection; the development of the fungus within the bodies of the young; and the final growth and establishment of new fungus-insect colonies are described. Parasitized insects are proportionately much more abundant during the late spring and summer months than during the fall and winter months. The type of parasitism is of a highly specialized nature. The fungus enters the circulatory system of the living insects and there develops numerous coils which absorb food from the insect. A number of the insects are finally killed and used up by the fungus; others, though infected, may digest the fungal haustoria and survive to reproduce, and some are free from any infection. Such a conjoint relationship beneficial both to the fungus and to the scale insects is obviously symbiotic.