Aggregate sheath spot and sheath spot of rice were found in Australia in 2001. A disease survey revealed that both diseases are already well distributed within the Australian rice growing areas and that disease severity can be relatively important in some crops. Epidemiological studies showed that under Australian conditions, both Rhizoctonia oryzae and R. oryzae-sativae could overwinter as mycelium on straw debris, regardless of whether the straw is left on the ground or buried. Mycelium of R. oryzae-sativae present on rice straw was also found to be able to produce sclerotia, as a saprophyte, during the overwintering period. Results also strongly suggest that overwintered hyphal fragments present in the debris supplement the sclerotia as a primary source of inoculum, and also highlight the importance of straw management to reduce the inoculum of both pathogens in rice paddocks. The effect of burning stubble on the survival of laboratory-produced sclerotia of R. oryzae-sativae was investigated and it was shown that the vast majority of the sclerotia present on the soil surface survived stubble burning regardless of whether it was a ‘cold burn’ or a ‘hot burn’. A threshold temperature for sclerotial mortality was found to be between 93 and 121°C.