A major constraint to the Canadian wood preservation industry in both domestic and export markets is the difficulty of penetrating Canadian wood species with preservatives. FPInnovations has put considerable effort into various forms of improved mechanical incising but these have not been adopted by the industry due to adverse effects on throughput and appearance of the final product. Recently, work in Europe has shown promising results from biological incising using white-rot fungi that colonize wood relatively rapidly but decay slowly. The use of European isolates of fungi in North America may be constrained by phytosanitary concerns. This report covers an experiment to screen North American isolates of white-rot fungi for potential as biological control agents. A modification of the soil-block test method was used to evaluate the ability of a range of fungi to improve permeability without affecting strength properties. Wood samples were exposed to the fungi for zero, two, four and six week time increments and were then treated with a 1.5% ACQ-D solution. Preservative uptake was calculated based on change in weight before and after treatment. Two isolates of Dichomitus squalens were found that dramatically increased preservative uptake. These samples were tested for strength loss and preservative penetration. Spruce samples exposed to D. squalens isolate 78A for six weeks were completely penetrated with preservative (19 mm depth) in all six samples. D. squalens 78B also showed promising results in pine and spruce samples based on uptake and penetration data. No stiffness loss was detected in any of these samples based on results from the crushing tests.