Mycophagous mammals excavate and ingest fruiting bodies (ascomata) of hypogeous ectomycorrhizal fungi and produce faeces containing numerous spores. To evaluate the significance of mycophagy to plant hosts we compared inoculation rate and degree of fungal development on red spruce (Picea rubens) seedlings treated with (1) faeces of the northern flying squirrel (Glaucomys sabrinus) against seedlings treated with (2) ascospores of Elaphomyces granulatus, and (3) those grown in natural forest soil or (4) forest soil that had been rendered sterile. No seedlings grown in sterilised soil showed fungal colonization. Significantly more seedlings were colonized in natural forest soil (97.5 %) than in sterile soil treated with squirrel faeces (69.2 %) or fruiting body spores (27.5 %). Treatment with squirrel faeces produced significantly more colonization than treatment with fruiting body spores. Fungal development was significantly greater on seedlings grown in forest soil compared with other treatments, but did not differ significantly between squirrel faeces and fruiting body treatments. These results demonstrate that passage through the digestive tract of flying squirrels may enhance germination and inoculation potential of fruiting body spores, although actively growing mycelium in forest soil may be the primary and most effective means by which seedlings develop mycorrhizae under natural conditions.