Two of five scalloped hammerhead sharks (Sphyrna lewini) captured May 1987 in Hawaii (USA) developed granulomatous exudative mycotic dermatitis localized in the lateral line canal system. The lesion initially was noted in the cephalic canals, but over a period of months extended into the lateral canal. Fusarium solani and Vibrio spp. were isolated from the canal exudate of both sharks. Bacterial colonies were not observed in the canal walls or surrounding tissues. Fusarium solani infection resulted in a chronic physical and behavioral deterioration of the two sharks; one shark was euthanized in September 1988 and the other in July 1989. This is the first report of Fusarium solani infection in the lateral line canal system and the third account in hammerhead sharks.