Paecilomyces rot of apples is a postharvest disease caused by the thermotolerant fungus Paecilomyces niveus (Byssochlamys nivea). The etiology of disease and the activity of fungicides against P. niveus are not yet well understood. This study evaluated the ability of P. niveus to infect 'Gala' apples growing in a conventionally managed orchard. In addition, the sensitivity of P. niveus isolates to postharvest fungicides difenoconazole, fludioxonil, and pyrimethanil was characterized for isolates from both agricultural and nonagricultural environments. Apples were wounded and mock-inoculated or inoculated with P. niveus in early July. At the time of harvest, 8 weeks after wounding, the inoculated apples had significantly larger lesions than mock-inoculated apples (P < 0.005). The average diameter of lesions on wound-inoculated apples was 11.17 mm ± 6.82 SD, while the average diameter of mock-inoculated lesions was 3.34 mm ± 1.85 SD. Disease symptoms in the orchard were similar to postharvest symptoms of Paecilomyces rot. Symptoms included a brown, flattened, circular lesion with faint concentric rings. The necrosis of mesocarp was firm and roughly U-shaped. Baseline isolates of P. niveus, from nonagricultural environments, were used to determine the effective fungicide dose at which growth was inhibited by 50% (EC50). Furthermore, fungicide sensitivity of P. niveus isolates was examined using relative growth assays at the mean baseline EC50 values to compare baseline isolates with isolates obtained from commercial apple orchards where they were likely exposed to fungicides. Among the exposed isolates, reduced sensitivity to all fungicides was observed, but significant differences between baseline and exposed isolates were only observed with fludioxonil (P < 0.0001). This is the first report demonstrating that P. niveus can infect apples that are wound-inoculated in the orchard and that isolates from agricultural environments are less sensitive to common fungicides, especially fludioxonil. This finding may have implications for the control of this postharvest diseases. Whether natural infections of apples by P. niveus is initiated in the orchard or during postharvest has yet to be determined.