The role of fungi in determining rates of wood decomposition and nutrient release in forest ecosystems is poorly understood. The decomposition of wood from three species of Nothofagus by 12 species of widely occurring New Zealand wood-decay fungi was investigated in vitro under standardized conditions. Wood mass loss varied strongly among fungal species and to a lesser extent with the species of wood. The species of fungi in this study were divided into three groups based on the extent of mass loss after 15 weeks: (1) rapid (>65% reduction in mass, Fomes hemitephrus, Pleurotus purpureoolivaceus, Trametes versicolor, and Ganoderma cf. applanatum), (2) intermediate (15%–30%, Phellinus sp., Schizopora radula, Phellinus nothofagi, and Skeletocutis stramenticus), and (3) slow (<10%, Armillaria novaezelandiae, Postia pelliculosa, Australoporus tasmanicus, and Laetiporus portentosus). For several fungal species, the final contents of nitrogen, phosphorus, and calcium in the remaining wood exceeded the initial nutrient contents in the wood, indicating that nutrient sequestration from the supporting soil matrix occurred during decomposition. Nutrient dynamics during decomposition varied with wood species, but the variation among different fungal species was much greater, indicating that fungal diversity is an important factor in determining nutrient flux in decaying wood.