Internal rot of chestnuts is a significant problem facing the Australian chestnut industry. It affects the kernel, manifesting in light, medium and dark brown lesions occurring on the endosperm and embryo. Previous surveys at Melbourne Markets, Victoria, Australia have shown rot incidence up to 40%. Consumer rejection is likely with rot incidence this high. The pathogen responsible has previously been identified as the endophyte, Phomopsis castanea. Recent research has also shown that a significant source of infection occurs during the flowering period via ascospores released from burrs decaying on the orchard floor. Disease incidence has also been observed to be associated with rainfall during the flowering period. P. castanea was recently found to be only a minor pathogen of chestnuts, with Gnomonia pascoe in fact being the major internal rot pathogen. A field survey that was conducted in Victoria (VIC) and New South Wales (NSW) found field rot incidence was significantly different between regions, orchards and cultivars. A market survey in NSW found acceptable industry levels of rot. These field and market surveys, and identification of the chestnut rot pathogen will better inform the Australian and international chestnut industries of the scope of internal rot problem in south-eastern Australia, and provide a basis for improved management of chestnut orchards.