That fungi take a very important place as ammonifying agents in the soil can no longer be doubted, but the question yet remains to be considered of the balance of profit or loss resulting from their activities. It has usually been considered that a part of the ammonia freed is used by the fungi themselves, but that the greater part is liberated, and so rendered available to nitrifying organisms. Both Neller[47] and Potter and Snyder[51] found that typical soil fungi inoculated into sterile soil grew with a vigour approximately equal to the growth induced by an inoculation of the entire soil flora. This is largely to be accounted for by the fact that when soils are sterilised by heat or by certain chemicals, breaking-down changes occur, and substances are liberated which are peculiarly favourable to fungus growth. This fact must be borne in mind when interpreting ammonification and other studies where the method is that of inoculation of fungi into sterilised soil. In many cases it tends to nullify any application of the results to normal soils, whilst in others the conclusions must be accepted with some reserve. In all cases Potter and Snyder[51] found that fungi caused a diminution in the amount of nitrates, that the ammonia was not much changed in amount, and that there was a decrease in the quantities of soluble non-protein nitrogen. The range of organic and inorganic nitrogenous compounds utilisable by soil fungi is very great. Ritter[56] has shown that certain forms can use the nitrogen of “free” nitric acid in the medium; Ritter,[56] Hagem,[26] and others, that soil fungi can use ammonia nitrogen equally with nitrate nitrogen, and Ehrenberg[21] concluded that soil fungi play a more important part in the building of albuminoids from ammonia than bacteria do. Ehrlich[22] has shown that various heterocyclic nitrogen compounds and alkaloids can serve as sources of nitrogen to soil fungi, whilst Ehrlich and Jacobsen[23] have found that soil fungi can form oxy-acids from amino-acids. Hagem,[26] Povah,[52] Bokorny,[6],[8] and others, state that for many soil forms organic nitrogen sources are better than inorganic sources, and that peptones, amino-acids, urea, and uric acids, etc., are very quickly utilised by species of _Mucor_, yeasts, and so forth. Butkevitch,[12] and Dox[18] have recently found that it depends on circumstances which compounds of protein molecule can be utilised by particular fungi, and that soil fungi can utilise both amino and amido complexes for the formation of ammonia. In 1919 Boas[4] showed for _Aspergillus niger_ that if a number of nitrogenous compounds are available the fungus absorbs the most highly dissociated.