Spatial variations in the capacity of propagules of arbuscular mycorrhizal (AM) and ectomycorrhizal (ECM) fungi to form associations in their natural habitats were investigated using bioassays with bait plants grown in intact cores of forest soil. These cores were collected from a sclerophyllous forest community dominated by Eucalyptus marginata Donn ex Smith (jarrah) and E. calophylla Lindley (marri) trees with a diverse shrub understorey in the mediterranean (winter rainfall) climatic zone of Western Australia. Small-scale (adjacent core) variations in the capacity of AM fungi to form associations were found to be as substantial as differences between locations 1 5 m apart. Comparisons of AM fungus colonization patterns within the roots of seedlings growing in the same core indicated that there was considerable spatial heterogeneity in the inoculums potential of ‘individual’ fungi within these 1 1 volumes of soil. A second experiment included bait plants to measure ECM formation as welt as AM formation and also considered the impact of soil disturbance. The disruption of hyphal networks reduced mycorrhizal formation somewhat, but it still remained highly variable. Some of this spatial heterogeneity could be attributed to differences in the organic matter content, length of fungal hyphae, or length of old mycorrhizal roots, measured within soil cores. In jarrah forest soil, mycelial systems of AM and ECM fungi apparently were localized in separate domains, and there were also zones where non-mycorrhizal roots (mostly cluster roots produced by members of the Proteaceae) predominated. More research is required to determine the size of domains of mycorrhizal mycelial systems in soils, how these spatial patterns change with time, and if they are associated with zones of resource utilization by different ‘functional groups’ of roots.