Abstract Three essential oils (Ceylon citronella, Cedarleaf and Geranium) were evaluated for their fungitoxic activity against four major sapstain fungi (Ophiostoma picea, Aureobasium pullulans, Alternaria alternata, Gliocladium viride) and compatibility with one potential biocontrol fungus (Gliocladium roseurri). Sapstain fungi, which belong to deuteromycetes and ascomycetes, generally colonize and discolor the sapwood of softwood and hardwood lumber. Geranium and citronella oils inhibited growth of all fungi at medium (2.5%, volume/volume) and high (5%, volume/volume) concentrations respectively except for O. piceae and G. viride. Cedarleaf oil inhibited O. piceae at all concentrations and A. alternaia at only high concentration. Cedarleaf oil was also partially compatible with the biological control agent, G. roseum. None of the oils evaluated could be characterized as a selective sterilant.