Monacrosporiumellipsosporum, a nematode-trapping fungus, was isolated by baiting with sclerotia of Sclerotinia sclerotiorum in soil from a tobacco field in Yuxi, Yunnan Province. Colonization frequency of the sclerotia by the fungus was 18% in natural soil. Reinoculation tests by placing surface-sterilized sclerotia on fungal cultures for two weeks and then surfacesterilized again led to 32% sclerotia be infected. Dual culture tests in PDA plates did not give rise to a suppression zone between the colonies of M. Ellipsosporum and its counterpart fungi S. Sclerotiorum and Rhizoctonia solani, suggesting there was little or no nutritional competition and absent of antifungal compounds. However, M. Ellipsosporum could grow over absent of S. Sclerotiorum and R. Solani, and significantly inhibited their growth on agar plates. Scanning electron and light microscopic observations showed thathyphae of M. Ellipsosporum grew along and appressed on hypha of S. Sclerotiorum and coiled around hyphae of R. Solani. Assays of cell wall-degrading enzymes showed that M. Ellipsosporum grew well in chitin agar media, with clear transparent hydrolysis zones. Activities of total chitinase, exo-chitinase, β-1, 3-glucanase and protease were 140.2±11.9, 82.9±4.1, 111.2±7.6 and 76.1±4.3 U respectively, after incubation for 4 days at 30℃ in liquid media containing ground sclerotia of S. Sclerotiorum as sole nutrient source. These enzymes might be important in the mycoparasitic activity of M. Ellipsosporum.