In the sandy soils of eastern Virginia, soybean seedlings are colonized by hypovirulent and virulent isolates of Fusarium oxysporum and F. solani. Our objectives were to determine if prior inoculation of soybean seeds with hypovirulent F. oxysporum isolates reduced severity of seedling disease in naturally infested soil, and to determine if there was an association between the presence of dsRNA mycovirus and hypovirulence in isolates of F. oxysporum and F. solani from soybean plants. The presence of dsRNA was not associated with hypovirulence in F. oxysporum since some hypovirulent isolates contained dsRNA while other hypovirulent isolates did not. Furthermore, of six dsRNA-containing F. oxysporum isolates, three were hypovirulent and three were virulent. Four segments of dsRNA, with sizes of 4.0, 3.1, 2.7 and 2.2 kb were detected in extracts of all six F. oxysporum isolates. No hypovirulent or dsRNA-containing of F. solani isolates were found. Prior inoculation of cv. Essex soybean seeds with conidia of dsRNA-free hypovirulent F. oxysporum isolates significantly (P < 0.05) reduced disease severity on cotyledons and hypocotyls, and increased the rate of seedling emergence in field soil, compared to control plants. No significant (P > 0.05) differences were found between dsRNA-containing and dsRNA-free hypovirulent F. oxysporum isolates in their effects on reducing disease severity. Hypovirulent isolates that colonize soybean tissues may play a role in reducing Fusarium seedling disease of soybean in natural soils.