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To further our understanding of wood decay in living light red meranti (Shorea smithiana) trees, microscopic characteristics of the cell and cell wall degradations of S. smithiana wood in the presence of the decay fungi, the identity of the causal fungi, and the decay potential and pattern by an isolated fungus were investigated. Cell wall degradations, including cell wall thinning, bore holes formation, rounded pit erosion, and eroded channel opening were clearly observed under light and scanning electron microscopy. In transverse view, many large voids resulting from a coalition of degraded wood tissue appeared in the decayed canker zone. All these observations suggest the well-known simultaneous decay pattern caused by white-rot fungi. By phylogenetic analysis based on the sequences of internal transcribed spacer region of ribosomal DNA, a basidiomycete fungus isolated from the decayed wood was identified as Schizophyllum commune. The degradation caused by this fungus on sound S. smithiana wood in an in situ laboratory decay test was classified as the early stage of simultaneous decay, and showed a similar pattern to that observed in the wood samples naturally decayed.