Understanding the mechanisms underlying wood decay basidiomycete community dynamics is crucial for fully understanding decomposition processes, and for modelling ecosystem function and resilience to environmental change. Competition drives community development in decaying woody resources, with interactions occurring at a distance, following physical contact, and through specialised relationships such as mycoparasitism. Outcomes of combative interactions range from replacement, where one mycelium displaces another, to deadlock, where neither combatant captures territory from the other; and a spectrum of intermediate outcomes (i.e. partial or mutual replacement) lie between these extremes. Many wood decay basidiomycetes coexist within a resource, in a complex and dynamic community, and new research techniques are focussing on spatial orientation of interactions in 3 dimensions, as opposed to historical two-dimensional research. Not only do interactions drive changes in species composition and thus wood decomposition rate, they also may have industrial applications in biocontrol of pathogenic or nuisance fungi, enzyme production, and in the production of novel antifungals and antibiotics. Altogether, fungal interactions are a fascinating and important field of study.