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We reviewed the ecological characteristics of wood-inhabiting fungi in Malaysia in relation to the major threats to these fungi; we also examined the forest uses that would help to conserve them. Although wood-inhabiting fungi do not show high host specificity or preference in many tropical areas, several are specific to Dipterocarpaceae trees in Malaysia and some species may preferably inhabit other minor tree species. Tree size and decomposition stage are also important determinants of which fungi are present. Among the polypores described by E. J. H. Corner, 41 and 26 species have been recorded only from Malaysian lowland rainforest and montane forest, respectively. Evidence suggests that both of these forest types in Malaysia are home to unique fungal communities. More than 30 polypore species described by Corner are known only from their type localities. These species are likely rare and may be restricted to old-growth forests. Logging decreases species richness of wood-inhabiting fungi because the number of natural treefalls is decreased in logged forests, and the decline of old-growth forests is a major threat to conservation of Malaysian fungi. However, species richness of wood-inhabiting fungi is relatively high in old secondary forests and forests undergoing reduced-impact logging. The diversity of wood-inhabiting fungi is extremely low in oil palm plantations, whereas several species inhabit rubber-tree and acacia plantations. Preservation of old-growth forest is essential for conserving rare wood-inhabiting fungi in Malaysia, but old secondary forests, reduced-impact logged forests, and matured tree plantations may have some importance for the conservation of some species.