Diseased conifer nursery stock, including Douglas-fir, western larch, and Engelmann spruce, was selected from the U.S. Forest Service nursery at Coeur d'Alene, Idaho, to determine (1) the most probable cause of disease, (2) the fate of outplanted diseased stock, and (3) the height growth of outplanted diseased seedlings. Fusarium spp. were isolated at high frequency--up to 90 percent--from diseased and healthy seedlings and were considered the most probable causal agent. Both shoot and and root tissue were infected. Mortality of outplanted stock after three growing seasons was greater for seedlings originally classified as diseased than for healthy. The difference was most pronounced in western larch where 50 percent of diseased seedlings died compared to 30 percent of the healthy. The diseased stock that apparently recovered after two growing seasons had about the same height growth as controls, whereas seedlings not recovered had very poor growth. It is postulated that poor soil conditions in the nursery are responsible for the disease problem.