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I've pulled up the masonite and tiled floor in my laundry and there's cleary water damage in the floorboards, I just pushed a chisel all the way through the worst part. The adjacent two floorboards are still soft and on top there are white to grey trendils radiating out from the wet area. Unfortunately I'd scraped most of it off without thinking about it. Here's a pic

Laundry fungus or what?

The water seems to have gone in where the edge of the room wasn't sealed, the worst affected board runs under the wall.

How much of the floor should I cut out, and can/should I treat the adjacent/replacement floor with some kind of fungicide?

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up vote 8 down vote accepted

This type of damage is very common in situations like yours. Both the wood and masonite are good sources of food for mold to grow if damp or wet for prolonged periods of time. Do not distress, most molds are not extremely dangerous. Since your area is small you can treat it yourself. Remove all obvious mold with a putty knife and wash the area with bleach. There is an anti-bacterial/mildew bleach available at most home improvemant stores that works well, but regular laundry bleach will do the job. Take the proper precautions, gloves, dust mask, eye protection, etc. to avoid getting hurt from the bleach or inhaling any live mold spores. Don't attempt to sand mold off as that can spread the spores, keep it confined.

Let the cleaned area dry completely. Repeat the bleach wash if any traces of the mold is still visible after it dries. After the area is completely dried, you can paint the area to seal the boards.

Remove any badly rotted wood back to the center of the closest floor joist. Replace the board. If you have only shallow damage on some boards, they may be fine after treated and dried as long as they are still solid and support a normal load.

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Good answer. In my experience and reading, I've found that a 20% bleach solution is no better than a 100% bleach solution at killing the mold and is less irritating to the lungs and eyes. – Ghost Jun 29 '12 at 12:40
Good comment. a 20% solution is very effective. +vote – shirlock homes Jun 29 '12 at 23:08
Don't know what kind of mould it was, but it turns out that the floor on the other side of the room had been eaten by borers. I ended up stripping the whole floor out of the room and starting over. – Spike Aug 26 '12 at 0:01

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