Timer decay is caused by primarily enzymatic activities of microorganisms. For the first time fungal diversity of timber degrading fungi was studied in Gujarat, India. Timber Degrading Fungi belonging to Aphyllophorales are economically important as many of these cause serious damage in sawmills of Gujarat. To find out the association of the timber degrading fungi and timber decay problems in sawmills a survey was conducted during 2007 to 2011 in different sawmills of 5 districts of Gujarat i.e. Vadodara, Ahmedabad, Bharuch, Rajkot and Jamnagar. In the present study teak wood present in sawmills was infected with 14 types of fungi in which Lenzites sterioides and Trametes versicolor damaged the wood severely was reported for the first time. In all 94 sawmills were surveyed, the 28 sawmills were from Vadodara, 29 from Ahmedabad, 12 from Bharuch, 21 from Rajkot and 4 from Jamnagar. Out of 94 sawmills survyed, 84 sawmills were having timber rotting fungi associated with wood. Maximum fifteen and thirteen fungal species were observed in saw mills of Chhani road, followed by 11 in Station road, 7 in Dhabhoi road and 6 in Harni, Vadodara. Fours woods uninfected are Beyo, Marinty, Ash, and Arjun. Fourteen different types of fungi were found associated with teak, followed by seven in pinus, madhuca, Acacia nilotica, six in babul, neem, four in tamarind, Pithacoelobium and three in mango, Eucalyptus, African Mahagoni, Kapoor, Peltophoram rouxburghii, Derris pinnata wood respectively. The commonly observed timber decaying fungi were Schizophyllum commune, Flavodon flavus and Ganoderma lucidum belonging to Basidiomycota. Ascomycota members included was Daldinia concentrica and Xylaria polymorpha.