The largest recorded epidemic of sporotrichosis in the United States occurred in 1988 and involved a total of 84 cases in 15 states. All cases were associated with Wisconsin-grown sphagnum moss. Twenty-one clinical isolates of Sporothrix schenckii and 69 environmental isolates of Sporothrix spp. from the epidemic were characterized and compared. The environmental isolates were recovered from 102 samples of sphagnum moss and other material by using direct plating techniques. Characteristics examined included macroscopic and microscopic morphology, conversion to a yeast phase, exoantigen reactions, and virulence in mice. On the basis of these studies, eight environmental isolates were identified as S. schenckii, five were identified as Ophiostoma stenoceras, and the remainder were identified as Sporothrix species. The environmental isolates of S. schenckii were recovered from moss samples from one Pennsylvania nursery and from three New York State Soil and Water Conservation districts, but none were recovered from moss directly from the bogs in Wisconsin.