Brown rot fungi are a group of wood-decaying fungi that primarily affect hardwood trees. They break down cellulose and hemicellulose in the wood, leaving behind a brown, crumbly residue. This process can weaken the structural integrity of the wood, making it more susceptible to further decay and damage. These fungi thrive in warm, moist environments and are often found in forests and woodlands. Common species include Serpula lacrymans and Postia placenta. Brown rot is significant in forestry and timber industries, as it can lead to economic losses and affect the quality of wood products.