Matric potential influences water availability for soil- and wood-inhabiting fungi because the more negative the matric potential, the harder the substrate holds onto water, making it less available for microbial growth. The objectives of this study were to isolate epiphytic and endophytic fungi from bryophytes and assay their tolerance to matric-induced water stresses, and isolate terrestrial (soil) fungi to compare optimal matric potential of soil fungi to that of endophytes. Twelve fungal endophytes were isolated from two species of liverworts (Bazzania trilobataand Conocephalum conicum) and two moss species (Mnium punctatum and Polytrichum commune) from three habitats in central Pennsylvania. All epiphytic and endophytic isolates were assayed for their ability to grow on matric modified media (PEG 8000) at ca. 0 MPa, -5 MPa, -10 MPa, -15 MPa and -20 MPa. Results for matrically modified media suggest that epiphytes/endophytes of Bazzania trilobata, Conocephalum conicum, and Mnium punctatum produced greater biomass (mg) from -10 MPa to -20 MPa, while epiphytes/endophytes of Polytrichum commune display more variation with greater biomass (dry weight) from -5 MPa to -20 MPa. Eleven out of twelve of the endophytes had limited biomass production (dry weight) at the weakest matric potential (ca. 0 MPa) which represented non-matrically modified media). All soil isolates in this study demonstrated the expected Type II response with diminished growth under increasing matric stress.