The sucrose-hydrolyzing activity in mycelium of the wheat stem rust fungus (Puccinia graminis Pers. f.sp. tritici Erikss. & E. Henn.) grown in axenic culture was compared with that in mycelium of Penicillium expansum (Linkex F. S. Gray). In subcellular fractions and permeabilized cells from Pu. graminis, most activity was bound tightly to the cell wall, whereas, in Pe. expansum, the enzyme was soluble and appeared to be located in the periplasmic space. Particulate preparations from mycelium of Pu. graminis hydrolyzed sucrose to a mixture of hexoses with a fructose: glucose ratio of about 0.8; hence the activity was essentially that of an ‘invertase’ (E.C. 3.2.1. 26, β-D-fructofuranoside fructohydrolase). Despite this slight deficit in fructose, no direct evidence was obtained for fructan transferase activity. By contrast, the enzyme preparation from Pe. expansum exhibited more transferase than hydrolase activity. The wall-bound enzyme from Pu. graminis showed a pH optimum of 5.0 to 5.5, and Km values at pH 5. of 3 and 40 mM for sucrose and raffinose, respectively. All attempts to solubilize substantially the wall-bound activity were unsuccessful, even after removal of 63% of the particulate matter by polysaccharide-degrading enzymes.